See the presentation a serial entrepreneur used to raise $20 million from Bessemer and Founders Fund for his solution for Americans living with chronic painMay 25, 2021
- Clearing, a chronic pain management startup, raised $20 million in seed funding from Bessemer and Founders Fund on Tuesday.
- The round valued the just-launched startup at $100 million.
- See the pitch deck cofounder Avi Dorfman used to convince investors to back his latest startup.
- See more stories on Insider’s business page.
A serial entrepreneur thinks he can unseat CVS, Walgreens, and Rite Aid by helping treat chronic pain online.
Avi Dorfman, cofounder of real estate brokerage company Compass who is currently in a legal battle over his stake, said Tuesday that his latest project Clearing raised $20 million in seed funding at a $100 million valuation. Bessemer and Founders Fund led the round, which also included several angel investors.
Clearing is essentially an online pharmacy for topical pain relief cream prescribed by its network of medical professionals, Dorfman explained. Over time, he said he hopes to delve deeper into treating more severe pain, but for now, he is focused on types of chronic pain that could otherwise be treated with Bengay or physical therapy.
As other direct-to-consumer startups like Ro and Hims eye the ever-growing digital health market for acquisition targets, Clearing is taking a different approach by focusing specifically on treating pain. Bessemer’s Steve Krauss, who invested in Clearing, said that he thinks the company can still make plenty of money in a niche part of healthcare because of the sheer number of Americans who currently suffer from chronic pain.
Chronic pain is often treated with highly addictive medications including opioids. Because of the potential for abuse, current regulations prohibit telehealth companies from prescribing these classes of drugs to patients without meeting them in person first.
“If you are a pain sufferer, your daily existence, the social and emotional aspects, it’s different than someone who has hair loss or erectile dysfunction, no offense, and that’s really important,” Krauss told Insider.
Here is the presentation Dorfman used to raise $20 million in seed funding at a $100 million valuation from Bessemer and Founders Fund.
Dorfman started Clearing in 2020 with help from his friend, Dr. Jacob Hascalovici, after helping a loved one navigate the complex world of treating chronic pain.
Dorfman and Hascalovici, who is a neurologist that specializes in treating pain, cited 2018 CDC data that estimated roughly 50 million Americans suffer from chronic pain.
Find out more about the CDC data here.
During the pandemic, Hascalovici's practice moved to telemedicine. He realized with Dorfman that treating chronic pain virtually could help increase access to high-quality care management for underserved patients.
Clearing patients answer a series of questions during the intake process that assesses their pain. Using software, it provides a probable diagnosis and refers the patient to a clinician on its website or app. That clinician will prescribe a topical treatment developed by Clearing that is mailed to the patient.
Patients are able to get a months' worth of treatment and access to care for free. After the month is up, they can opt into a monthly, bimonthly, or annual subscription. Clearing does not currently accept insurance.
With the funding, Clearing hopes to build additional services, such as a social network feature for chronic pain patients and offer other treatments like muscle relaxers.
Dorfman and Krauss both told Insider that the pandemic was the catalyst for launching Clearing due to the rapid adoption and patient preference of telemedicine and direct-to-consumer pharmacies like Capsule.
Direct-to-consumer healthcare is ushering in a new wave of healthcare companies that cater to patients' interests over other stakeholders like clinics or insurance companies, Krauss said.
"It's not a small vision that requires small dollars," Krauss said. He likened Clearing's ambition to Uber or DoorDash, which have become household names in their respective industries.
Part of that vision includes compiling data that can better inform chronic pain treatment regimens in the future. Without that data, Dorfman said, "It's difficult to know which [treatments] are effective and which are hocus pocus."
Dorfman tapped other tech startup executives from ClassPass, Uber, FanDuel, and Ellevest to build Clearing. Hascalovici will oversee the clinical team and see every Clearing patient at launch, he said.
Although Clearing does not have a formal board of investors, it did create a medical advisory board. It tapped orthopedists, pain specialists, and lifestyle clinicians to provide different perspectives on pain treatment.
It developed a personalized set of physical therapy tools that patients can use in addition to its topical creams as part of a comprehensive treatment plan patients can follow or adjust as needed.
"It's very important to note that we are not reinventing what a pain management clinic does today," Dorfman said.
Clearing will not prescribe opioids, Dorfman said, partly due to regulations around telemedicine prescriptions and partly due to the epidemic of abuse among chronic pain patients.
Clearing is currently treating patients located in New York, Pennsylvania, Ohio, California, Illinois, Tennessee, Georgia, Florida, and North Carolina and hopes to be up and running in Texas in the coming weeks.
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