Israeli MedTech startup, Zebra Medical Vision, has been acquired by Israeli imaging innovator, Nanox -- which began trading on NASDAQ almost a year ago. Nanox will shed out $100 million in stock, with an additional $100 million in stock paid upon Zebra’s performance.

Zebra’s software on Nanox hardware

Zebra Medical develops machine learning algorithms that help doctors better analyze results from CT, X-ray, and other medical imaging scans. The system helps doctors identify medical problems in patients' medical imaging, such as cerebral hemorrhage, breast cancer, lung disease, bone problems and more. The Israeli startup works with medical centers and health organizations around the world. The company’s SaaS model uses advanced ML algorithms and cloud technology to accurately process patient medical imaging. As a result, physicians from around the globe receive almost instant access to the analyzed screenings at their own workstations.

Over the years, Zebra has claimed more than a few milestones, including 7 FDA approvals. However, more recently, the company had fallen on hard times, and according to a TheMarker report, was forced to let go of nearly 15% of its roster. Another report noted the company had replaced two CEOs over the past year. Now, though, Zebra will merge into Nanox’s operations.

Zebra, which was founded in 2013 by Eyal Gura, Eyal Toledano, and Elad Benjamin, has raised $53 million (Pitchbook) spanning 8 years. Zebra Medical, according to the announcement, will operate as an independent subsidiary of Nanox, and continue to offer its products and service to global customers. In addition, the Zebra system will also be installed into Nanox’s imaging device, which has been nicknamed “the iPhone of CT machines” -- or better known as the Nanox.ARC.

Nanox.ARC credit: Nanox

Other than the futuristic, Star Trek-like design, the price of the Israeli developed imaging device sits around $10,000, which is pocket change compared to the $1-$3 million cost of standard imaging machines. Additionally, coming in at just 200kg, the Nanox machine is significantly lighter than standard CT and X-ray machines, which can reach up to 5 tons in weight. This is a major upgrade to the Nanox machine, which can now leverage Zebra’s FDA cleared cloud technology.

All share deal

The acquisition of Zebra, which as mentioned has experienced its fare share of problems this past year, is a bit of a letdown - for the founders, employees, and investors. Although investors see their initial investment quadrupled, still it’s a company that’s 8 years old. In addition, the deal is entirely share based, while usually these M&As include a share and cash component. This means that everyone’s return will be based on Nanox’s fluctuating share price.

“We took a strategic decision to join forces with Nanox and grow together as we share the same vision of a global health solution for all. We understand that in order to truly lead and shape this new AI-enabled diagnostic space, we’ll need both the superb hardware capabilities and coming install base , which Nanox delivers, and the AI and Cloud delivery capabilities, combined with proven regulatory and quality framework, which Zebra Medical Vision has built over seven years,” stated Eyal Gura, Co-Founder at Zebra Medical Vision. “Zebra-Med brings to Nanox clinical, regulatory, and cloud-deployment credibility, together with some of the world’s top healthcare brands as partners , from India to Brazil and health brands like InterMountain Health, Scotland and England’s NHS, Johnson & Johnson , Clalit Health Services and many more . I am positive that the teams will continue to build great things together and continue to impact patients lives “

“Expanding access to medical imaging via widespread deployment of the Nanox.ARC solves one of the obstacles to achieving true population health management,” stated Ran Poliakine, Chairman and Chief Executive Officer of Nanox. “Yet, the global shortage of trained radiologists represents a significant bottleneck in the imaging process. The Nanox.ARC, together with the acquisitions of Zebra Medical Vision and USARAD, if consummated, would move us toward our vision of deploying our Systems and have the support of a large network of radiologists empowered with highly advanced AI algorithms that will allow for the rapid interpretation of medical images into actionable medical interventions, which would represent an end-to-end, globally connected medical imaging solution. Furthermore, we are working to offer a solution even greater than that: population preventive health care through application of Zebra’s AI technology, if the acquisition is consummated.