Another fast food safety scandal rocked the industry in July 2017, when it was reported that customers had fallen ill after eating at Chipotle. This was after an initial outbreak in their restaurants in 2015. While many were quick to blame Chipotle, the truth is that solving this issue is quite complicated, and the problem has spawned an entire industry known as healthtech. In America alone, food safety affects 48 million people a year and costs $55.6 billion annually. Governments responsible for inspection duties are now working with technology firms like Tyler Technologies (NYSE:TYL), Ecolab (NYSE:ECL), CDW Corp. (NASDAQ:CDW), IBM (NYSE:IBM) and HealthSpace Data Systems Ltd. (CSE:HS); (OTC:HDSLF) to prevent food safety issues, like the July 2017 Chipotle incident from reoccurring.
Despite how far technology has advanced, no technology is capable of completely solving the food safety equation. Recently, the FDA has increased its software spending budget by $673 million to deal with the “data challenges” associated with food safety. Analysts estimate that the healthcare tech sector could be worth $228 billion a year by 2020.
A Disruptive Breakthrough Happening In the Healthtech Industry
HealthSpace has a pilot food safety audit program that’s set to begin this quarter. You’ve probably heard about the food safety alliance set up between Walmart and IBM last year. The HealthSpace trial could the next one to make headlines this year. The company’s value is based on providing proactive health solutions rather than reactive ones, with the goal of preventing food poisoning incidents from happening.
HealthSpace CTO Silas Garrison, previously employed by Digital Health Department prior to it being acquired by Tyler Technologies, summed up the company’s vision:
“We plan to disrupt the way consumers and businesses interact by creating an open and trusted storage mechanism that any technology company can use, whether in HealthSpace’s current business pipeline or not, to connect to a distributed ledger for the purpose of storing audit trail and inspection data.”
Statewide Applications Already In Place
After signing its first government contract in 1999, the HealthSpace platform is now being adopted by 10 statewide government programs touching 23 states. Customers include Health Canada and the state of Virginia, and its total contract value is over $10 million. Importantly, the company managed to maintain a 100% renewal and client retention rate over the past two decades.
HealthSpace also has a big presence in the private sector. The company now has over 200,000 restaurants and 14,000 hotels under its services, making sure that its software could reach as many places as possible, anywhere food is served.
Other Companies Governments Are Working With
Tyler Technologies (NYSE:TYL)
Tyler Technologies provides information management solutions and services for local governments across Canada, the U.S., the U.K. and the Caribbean. The company recently acquired Digital Health Department, an SaaS company that offers an environmental health software for public compliance.
IBM (NYSE:IBM)
IBM is often considered one of the most innovative companies, known for developing cognitive supercomputers and hardware. Over recent years, the company has placed more emphasis on cloud computing and analytics, with service agreements secured at various government levels.
Ecolab (NYSE:ECL)
Ecolab offers water, hygiene, and energy technology services to the healthcare and hospitality industries. These include sanitizing programs, pollution control, and energy conservation. Currently, its business reaches over 170 countries worldwide.
CDW Corp. (NASDAQ:CDW)
CDW is a provider of IT solutions for enterprises and governments in Canada, the U.S., and the U.K. The company’s portfolio includes more than 100,000 products and services from over 1,000 brands.
SaaS Businesses Hold The Key To Food Safety
Overall, the healthtech sector deserves attention for both its ability to minimize health risks in our food chain, and for the $228 billion market the technology addresses. Companies like HealthSpace have become a rare breed in the healthtech industry, as big firms have already been swallowed up most independent players (ie. Accela acquiring Decade Software in 2014). As the largest independent company left in the healthtech SaaS business, it’s possible that HealthSpace Data Systems Ltd. (CSE:HS); (OTC:HDSLF) may merge with another leading firm in the industry, especially with current revenue figures of $2 million.
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