Auckland-based Toku Eyes seems poised to make it big in North America following a US$8 million ($13m) Series A raise involving two of the biggest players in the US optometry market.
Toku Eyes makes AI-powered software that analyses scans of the back of your eye. Because your eye is transparent, it’s one of the easiest ways to get a picture of your veins - and changing colour or shape that indicates a heightened risk of type 2 diabetes, a stroke or cardiovascular problems.
The idea is to not just scan for diabetes-related preventable blindness, but give you a picture of your overall health.
Toku founder Dr Ehsan Vaghefi says a cardiovascular checkup would ordinarily entail a trip to your GP, then a referral to a specialist as you navigate an often jammed health system. He sees Toku Eyes’ platform being available in every optometrist in every mall, making it faster, cheaper and easier to get a snapshot of your cardiovascular health.
The funding round was led by Nasdaq-listed National Vision (market cap: $1.6 billion), the second biggest optical retailer in the US, and Japan’s Topcon Healthcare - a Japanese firm that’s one of the world’s larger makers of eye examination instruments.
Seed investor Icehouse Ventures also returned to support the new raise.
Vaghefi says National Vision and Topcon are strategic investors. All going to plan, they will also become Toku’s largest customers.
National Vision will trial Toku Eyes BioAge platform in one of its stores in Georgia then, all going well, expand it to all 40 stores in the US state - which it uses as its North American testbed - then beyond to all 1300 of its optical retail outlets.
Vaghefi says he’ll retain majority ownership, and that New Zealand will remain Toku Eyes R&D centre.
But the startup is being re-incorporated in the US as part of the deal, and the founder will be relocating from Auckland to Atlanta. Vaghefi says he’ll likely ultimately end up in San Diego, California, where National Vision has an office, as part of the push for regulatory approval of Toku’s most advanced product.
While an eye doctor - or ophthalmologist - can gauge your cardiovascular health today from an image of your eye, Vaghefi says Toku Eyes’ software can process images faster, pick up issues that a human might miss, and be driven by a cheaper, less qualified clinician further down the healthcare foodchain.
For the founder, his quest is personal.
“When I was going to school when I was little, other children would get help crossing the road and I would be helping my father across,” he told the Herald.
His dad was just 4 when he went blind as a result of congenital glaucoma - a preventable condition, even then.
Today, type 2 diabetes is the most common cause of blindness or vision impairment in New Zealanders aged 20 to 60.
Some 270,000 Kiwis have been diagnosed with type 2 diabetes, but estimates are that the true number could be 30 to 40 per cent higher.
Vaghefi - who has been in New Zealand for the past 16 years - first conceived of what would become Toku Eyes while working on imaging technology during his PhD in biomedical engineering at Auckland University (where he serves as an Associate Professor on top of his startup duties).
Toku Eyes - which earlier raised $3.6m in a seed round supported by Icehouse Ventures, the rich-list Mafsen family and Uniservices, is the latest in a string of AI-powered medtech startups that have emerged from Auckland University’s Bioengineering Institute.
The rollcall also includes Alimetry, which recently raised $16m for its gut dysfunction sensor, Formus Labs in orthopaedics, Kitea Health and the Peter Back-backed HeartLab, among others.
Toku Eyes (toku is te reo for “my”) will put its fresh injection of capital toward product development, and expanding staff numbers from 16 to 25.
The focus will be on R&D. Vaghefi says his firm will now rely on National Vision and Topcon Healthcare’s sales networks.
Toku Eyes has two products. One is BioAge, which is ready to go.
“Everyone has a chronological age and a biological age and often they don’t match,” Vaghefi says.
BioAge looks for signs of accelerated aging in retinal scans, which in turn is an indicator of various ailments. Its smarts hinge, in part, on an algorithm that rapidly compares your scan to a large database of images from other people of the same age and ethnicity.
Then there’s the more advanced product, which aims to provide a full window into your cardiovascular health. Trials and regulatory approval will be required. Vaghefi has already recruited a team of cardiovascular surgeons to act as consultants. All have prior experience navigating through the Federal Drug Administration process. Vaghefi sees commercialisation in around 12 to 18 months.
“Achieving significant technical milestones, entering overseas markets, and securing strategic investment typically takes more than three years for New Zealand deep tech companies. Ehsan and his team have accomplished this in 18 months. We are delighted to continue to invest in their execution,” said Icehouse Ventures CEO Robbie Paul.
“Through AI-powered technology, Toku has found a way to identify potentially life-saving information quickly, accurately, and unobtrusively during a routine eye exam. We’re investing to help make that technology available to everyone who relies on us to help them see better, to live better, while also bridging the gap between eyecare providers and primary care,” said National Vision’s strategy and development head Priti Patel.
“This is an opportunity to help shape AI technologies that will prioritise better outcomes for patients.”
It’s more than just nice words. Patel voted with her wallet.
Asked about raising money during a venture capital drought, Vaghefi just shrugs. He wouldn’t know.
“We didn’t look for VC money,” he says.
Instead Toku Eyes went to National Vision and Tocon, looking to sell them its product.
“They just fell in love with the product and decided to invest,” the founder says.
Vaghefi declines to give a post-money valuation, but says he retains majority control.