Casana raises $14 million in funding, Datto founder tapped as CEO

Casana, a Rochester healthcare technology firm previously known as Heart Health Intelligence Inc., has secured $14 million in Series A funding, bringing the total capital raised to $16.6 million.

Datto Founder and CEO Austin McChord has stepped in as CEO of Casana as part of closing the Series A funding.

The financing round was led by General Catalyst and the Outsiders Fund, with participation from Bemis Manufacturing Co., the largest manufacturer of toilet seats in the world and the lead investor for Casana’s seed funding round, officials said.

Casana will use its financing to bring to market the firm’s first product, the Heart Seat. The company plans to pursue FDA clearance to further validate the clinical grade technology built into the Heart Seat that makes it a unique IoT device for heart disease management. (provided)
Casana will use its financing to bring to market the firm’s first product, the Heart Seat. (provided)

Casana will use its financing to bring to market the firm’s first product, the Heart Seat. The company plans to pursue FDA clearance to further validate the clinical-grade technology built into the Heart Seat that makes it a unique IoT device for heart disease management.

The company also plans to use the funds to accelerate its work studying the benefits of an IoT heart health device for heart failure patients with health systems and risk-bearing organizations, including the University of Florida and the Villages Health, officials said.

The Heart Seat originally was developed by Casana Founder Nicholas Conn at Rochester Institute of Technology to enable physicians to understand the health of their patients between doctor visits, without adding burden to their workflow. The Heart Seat is a cloud-connected, self-contained toilet seat-based cardiovascular monitoring system that measures health parameters for assessing heart health.

Austin McChord
Austin McChord

“Our goal is to be able to monitor a patient’s health more naturally at home, without interruption of their daily routine,” McChord said in a statement. “The toilet seat is not a tech gadget. Unlike a wearable device, you can’t take it off, forget to use it or mess it up. If we do our job right, when patients use our effortless in-home heart monitoring device, we are invisible unless their health status needs attention.”

The Heart Seat has been tested through multiple peer-reviewed research studies. By using the passive and consistent home cardiac monitoring data from the device, doctors will have a better understanding of chronic conditions and will be able to address patients’ needs as they arise.

“As a clinical cardiologist who has cared for hundreds of heart failure patients, I know firsthand how important it is to get a real-time picture of a patients’ health in order to adjust their medical regimen and avoid future hospitalizations,” said Jeffrey Leiden M.D., Casana board chairman and executive chairman and former CEO of Vertex Pharmaceuticals. “As medicine moves out of the doctor’s office and into the home, Casana is employing a cutting-edge, user-friendly in-home heart health monitoring device that allows doctors and patients to monitor their cardiac health status from home on a daily basis. The Heart Seat has the potential to both improve patient outcomes with heart disease prevention and decrease the high costs of heart failure in the U.S.”

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RIT launches billion-dollar fundraising campaign

The president of Rochester Institute of Technology had been promising a historic announcement for weeks.

David Munson Jr.
David Munson

Amid musical and theatrical performances at the ice rink-turned-nightclub Thursday, July 12, David C. Munson was scheduled to make the announcement before 2,000 guests: RIT has launched a $1 billion fundraising campaign to take the university to another level.

The $1 billion is the largest campaign in RIT’s history. The money would take the college from its old image of rapidly growing technical university answering the needs of industry, to a place where creativity and innovation is the norm in all disciplines, and areas such as performing arts and liberal arts are newly highlighted.

“This place is going to be much more well-rounded several years down the road,” Munson said in a recent interview.  “A lot of folks think that we’re educating the vast majority of our students for specific careers,” he said. Rather than preparing students to fit within pre-existing systems, the vision Munson articulated is for RIT students to become the makers of new systems, not just in business and computing, but in medicine, law and politics, too.

RIT’s current strengths will continue to be part of the picture — just more creatively and innovatively.

“RIT has a very strong reputation as a very career-oriented institution,” Munson said. “That’s not all we’re about anymore.”

Munson laid out a four-pillar campaign:

  • $400 million aimed at adding interdisciplinary research as well as facilities and activities for corporate research.
  • $280 million to enhance student experience, from experiential learning opportunities to creative spaces for innovation to a performing arts center.
  • $200 million for attracting special talent at the professor and student level by endowing professorships, adding teaching awards, funding student scholarships and research projects, and enhancing diversity programs.
  • $120 million for future initiatives by way of adding to the university’s endowment and educational programs.
Austin McChord
Austin McChord

If some of these plans sound familiar, that’s because they line up with plans for $50 million donated to RIT in December by 2009 alum Austin McChord. That gift is included in the $530 million already raised or pledged to the campaign over the last several years. Typical of institutional fundraising, RIT spent some time cultivating and securing major gifts (some of which have already been announced) quietly before taking the fundraising to the larger community.

What’s not typical, Munson pointed out, is the inclusion in this campaign of government grants, which was done to highlight the university’s new emphasis on research.

The university also named the leadership for “Transforming RIT: The Campaign for Greatness”: Thomas F. Judson Jr., chairman of  Rochester’s The Pike Companies, and 1985 RIT graduate Kevin J. Surace, CEO of Appvance Inc., an Inc. magazine Entrepreneur of the Year. The campaign is scheduled to end in 2022.

While a $1 billion campaign might seem huge in Rochester terms, and it’s larger than the campaign goal that was set before Munson arrived a year ago, it’s a fairly common goal among research-level universities, according to David Bass, senior director of research for the Council for Advancement and Support of Education. That amount was the median campaign goal for those types of universities in 2015, he said, first showing up in CASE’s surveys in 1997.

But it’s still a significant number, Bass said, and reflects a vote of confidence the institution expects from its supporters and the direction it has mapped out for the future.

“An institution’s ability to raise funds on such a scale is the result of sustained relationship-building with prospective donors,” Bass said. “Major gifts reflect an extraordinary level of trust in the institution, a commitment to the institution’s mission and vision, and a belief that the institution will use the funds in ways that fulfill the donor’s philanthropic goals and that have a transformative impact on lives and society.”

In some ways, RIT may have to work harder than some schools to reach its goal. Though the university was founded in 1829, its oldest living alumni graduated from a much smaller school and many graduated with two-year degrees in practical industrial fields. More recent alumni have much more company — the school has about 19,000 students here and abroad; about half of RIT’s alumni graduated in the 21st century.

“This school is essentially 50 years old,” Munson said, referring to its growth since it moved to Henrietta from downtown Rochester. “We are having to rely on younger alumni,” he said, rather than the gifts from people in their 70s and 80s that are the mainstay of many institutions.

Still, there may be more McChords out there. “We do have very notable people (alumni) out there in their 40s,” Munson said. With that in mind, “We’re going to devise our campaign materials that will attract the eyes of everybody.”

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Datto growing fast

Datto is renovating space in The Metropolitan, where it will occupy offices on floors 11 through 15. (Bennett Loudon)
Datto is renovating space in The Metropolitan, where it will occupy offices on floors 11 through 15. (Bennett Loudon)

The Lite-Brite wall hasn’t been installed yet.

But there’s a cubicle that has been turned into a ball pit. And the kitchens are stocked with free snacks—cereal, pistachios, wasabi peas, granola bars and others—on each floor of Datto’s offices in The Metropolitan. Those features, colorful décor, and the multiple monitors on every desk, along with televisions screens broadcasting sales closed and Seinfeld episodes, declare this is a high-tech company with a youthful bent.

And like most youth, it’s growing rapidly. So rapidly that when the company merged and was acquired for $1.5 billion earlier this month, the founder, Austin McChord, was able to hand over a $50 million donation to his alma mater and one of the biggest suppliers of his employee pool—Rochester Institute of Technology.

The data-protection company that started its Rochester office with five employees three years ago has grown at an astonishing rate and now is revamping a total of five floors, totaling 75,000 square feet, so it will have room for 400 employees very soon.

“It’s just explosive what’s happening,” said Heidi N. Zimmer-Meyer, president of the Rochester Downtown Development Corp. “What we have in our community and particularly downtown allowed that to happen.”

McChord started Datto in the basement of his father’s office building in Norwalk, Conn., in 2007, and the company’s headquarters are still in Norwalk today. Datto’s gone a little more upscale lately, adding offices in Boston; Portland, Ore.; and Reading, U.K. It now has 1,400 employees.

The Rochester office was added in 2014 at the RIT Center for Urban Entrepreneurship, located in the former Rochester Savings Bank on Franklin Street for the last two years. As the first company to take advantage of the Startup NY tax-free incentives, the company was expected to grow, but no one could have predicted it would grow this large this soon.

“Datto is leading the pack in so many ways,” Zimmer-Meyer said. While the fastest growing, it’s just one of 155 startups that have landed in downtown Rochester, she said. Access to high-tech graduates from RIT is one of Rochester’s selling points to such companies.

Datto’s merger with Autotask Corp. as part of its acquisition by Vista Equity Partners brings with it new offices in Richmond, U.K.; Beijing; and Sydney, making the company more balanced between domestic and international business, said Jason Elston, director of North American tech support for Datto. Though situated in Rochester, Elston has been managing tech support across Datto’s footprint. Now, however, he is taking on the myriad tasks of merging of Datto and Autotask.

Elston, formerly head of tech support at RIT, joined Datto when the Rochester office was set up with a handful people. But that level of staffing didn’t last for long.

“We have always been kind of busting our buttons as far as office space,’” Elston said. The Franklin Street offices felt too small in just a few months, he said. Additional office space was created in The Metropolitan about nine months ago, but there has been considerable shifting in that time.

Datto currently employs just under 200 workers in Rochester and expects to grow to 400 employees here. (Bennett Loudon)
Datto currently employs just under 200 workers in Rochester and expects to grow to 400 employees here. (Bennett Loudon)

The company currently has just under 200 employees in Rochester, with a large segment working in tech support. Renovations at The Metropolitan anticipate moving staff from Franklin Street so the local employees will be under a single roof, and hiring even more people as a result of the merger and continued growth. Datto will have offices on floors 11 through 15 of The Metropolitan, featuring a large event space on 13 where the staff can enjoy free weekly lunches together, and slides that connect floors 13 and 14 and floors 12 and 13.

“The Autotask relationship is going to open more doors for us,” Elston said, helping Datto compete against much larger providers of computer services such as Cisco, Dell, HP and others. “Our sales people are champing at the bit.

Previously Datto focused on selling data protection hardware and capacity to contractors who provide information technology services to small companies that can’t manage IT departments of their own. Autotask also sells to those contractors but its market includes direct sales to the end consumers and additional products. The two companies overlap in only about 10 percent of their current customers.

McChord was on vacation and unable to be interviewed for this article.  He’s in Rochester two or three times a month, Elston said, for Datto business or to work at RIT, where he is a trustee.

Zimmer-Meyer praised McChord’s gift to RIT as being both generous and genius in the way it will support development of the kind of students he will hire in the future, as will other high-tech companies in Rochester. Thirty million dollars will go toward creativity and entrepreneurship facilities, activities and scholarships, while the other $20 million is being set aside for expanding cybersecurity and artificial intelligence studies at RIT.

Companies that produce “software and code-writing are based in Rochester because that’s one of our strengths,” Zimmer-Meyer said. Indeed, Elston said RIT grads are common among the applications for Datto’s Rochester positions, but many of the Norwalk jobs have also been filled with RIT grads from New England.

RIT connection or not, plenty of people are trying to work for Datto.

“I’ll put a posting up for tech support and I’ll get 150 resumes,” Elston said. Out of those he picks the 12 or 15 best to hire and sends them all to Norwalk for two days of “Datto University.” Elston said they’re not all binary computer experts, as some of his best trainees have come from gas station employment where they’re used to working on a problem until they can solve it. A good team of trainees includes several types, he said.

“I like a self-starter,” Elston said. “We want the super-technology (person) with the retail worker who can smile through the phone. … We aim to strike that balance between customer services and tech.”

After a travel day the pack returns to Rochester to complete the two weeks of training. During a recent visit to the office, the training room, which looks out of the east side of the building toward Tower 280, was filled with trainers undergoing their own training.

McChord will continue to be the CEO of the newly merged company, imbuing his particular brand on a growing sector of the high-tech world.

“He prides himself on a direct attack model,” Elston said, meaning that customers who have a problem will reach a real person on the first attempt to contact the company and that person will attack the problem without shifting the call through a series of electronic menus. “That person is a tech and will start working on your problem,” Ellston said. “He doesn’t want any hoops jumped through.”

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RIT alum makes historic contribution of $50 million


Austin McChord
Austin McChord

The founder and CEO of a Connecticut data-protection company is giving Rochester Institute of Technology $50 million, the largest donation in the university’s history and one of the largest ever in the Rochester region.

Austin McChord, 32, a 2009 graduate of RIT and a member of the university’s board of trustees, founded Datto in the basement of his father’s office building in Norwalk, Conn., before he graduated from RIT and grew it to a worth of more than $1 billion. The company was just acquired by Vista Equity Partners and merged with Autotask Corp. to create a new company, which McChord will head as CEO. Datto has about 1,400 employees in nine countries, including about 200 in Rochester.

“My success today would not have been possible without my time at RIT,” McChord said. He graduated from RIT in 2009 with a degree in bioinformatics.

In light of the historic nature of the donation, RIT invited the public, students, parents and other members of the community to attend the announcement on the Henrietta campus Wednesday afternoon, and also made arrangements to have it streamed live. More than 4,000 people watched the announcement online, while perhaps 200 packed into the Simone Center for Student Innovation to hear the announcement firsthand and celebrate with cowbells and other hoopla.

When RIT President David Munson made the actual announcement, it was greeted by gasps and other exclamations, clapping, cowbell ringing and a standing ovation.

The donation is larger than any other given to a local education institution; next largest would seem to be the $30 million donated by Edmund A. Hajim to the University of Rochester in 2008. The only larger donation in general that observers could recall is the $61 million that brothers Richard and Robert Sands and their mother, Mickey Sands, donated to the Rochester Area Community Foundation in 2016, creating the Sands Family Supporting Foundation. The Sands are the family behind beverage giant Constellation Brands, founded as Canandaigua Wines by the late patriarch, Marvin Sands.

At RIT, no prior single donation has exceeded $14 million. The largest cumulative donation to RIT to this point has been $34.5 million from James S. Gleason and the Gleason Family Foundation, representing the family behind the Rochester company that has made gear-making machinery for more than a century.

McChord’s donation has been designated for two major areas:

  • $30 million for programs and facilities to encourage creativity and entrepreneurship at RIT, including $17.5 million to launch a Maker Library & Innovative Learning Complex of the Future. The new building will connect RIT’s Wallace Center (the current library) and the Student Alumni Union. Included are funds for equipment, faculty positions and scholarships, such as new “Entrepreneurial Gap Year” fellowships.
  • $20 million to bolster RIT’s study of cybersecurity and artificial intelligence, primarily in its College of Computing and Information Sciences. The funds will expand facilities and establish endowments for faculty and graduate students.

“A gift of this magnitude will help propel RIT from excellence to preeminence,” said Munson. “We are so proud of our alumnus Austin McChord. He was passionate about his idea and he turned it into a big success. This embodies the creative element that we want to further highlight at RIT. Every student can be involved in creating things that never before existed, and then putting the result into play. His investment in RIT will help our students and faculty make their mark on the world.”

McChord said former RIT President Bill Destler, who is a friend, inspired him to make the donation.

“My goal with this gift is two-fold,” said McChord. “First, is to help make more resources available to students, alumni and the community at-large to create, build and innovate for the future. But it’s also to help recognize those who helped you along the way.”

Destler, who retired June, helped give the background about how the donation came to be before Munson announced the size of the historic gift.

“I am thrilled that Austin McChord has chosen to share his success with RIT in the form of this most generous gift,” Destler said. “It’s truly been a pleasure to get to know him and to watch his business grow, internationally as well as right here in Rochester, and I’m excited to see what the future holds for him as well as for the programs and projects this gift will support.”

McChord and Destler said the gift had been in the works for a couple of years, but was waiting to be executed when Datto was acquired, providing capital McChord could donate. ” ‘What are you going to do with all this money?,’ ” McChord recalled Destler asking. When McChord told Destler that he wanted to cap the donation at $50 million should the sale be especially fruitful, he said Destler looked a little disappointed.

“Until this moment, (heading) down in the elevator, I had no idea it would be such a big deal,” McChord said.

McChord has remained an active part of RIT, frequently serving as a speaker at various events, including the 2017 commencement. His company sponsored RIT48, an entrepreneurship competition, and he has been a mentor for RIT’s SummerStart program for entrepreneurs who want to develop their business concepts.

Datto was the first company to take advantage of the Start-Up NY program in the Rochester area in 2014, sharing space at RIT’s Downtown Center at 40 Franklin St. It has expanded to house some of its employees at The Metropolitan, formerly known as Chase Tower. McChord said the Rochester part of the company will continue along the same path it has been on since 2014, and the company will continue to be called Datto.

RIT gave McChord a gift in appreciation for the donation, using part of his commencement speech as a suggestion. In that speech, which Munson played at the press conference, McChord told graduates that he began Datto hoping to sell it for $100,000 so he could buy an Audi sports car like the one the comic book character Iron Man drives. The college presented him with a toy Audi large enough for a toddler to ride in and painted RIT orange. Munson said he hoped it would fit in with the wall of Legos, ball pit and other toys in place at Datto.


RIT's gift to mega-donor Austin McChord
RIT’s gift to mega-donor Austin McChord

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