The money will be used to further develop TrueVault’s “database as a service,” which provides a secure API for healthcare apps to use when storing sensitive patient data. Such data security is critical for healthcare startups to become compliant with the Health Insurance Portability and Accountability Act (HIPAA) regulations regarding patient privacy. TrueVault, which charges its clients $0.001 per API call, currently has over 300 customers. You can read more in-depth details about how the service works in TechCrunch’s earlier coverage here.
I’m told that the TrueVault concept was such a hit at YC Demo Day, that the company secured fully $2 million of the $2.5 million seed on Demo Day itself ($500,000 of the funding already had been committed.) According to TrueVault co-founder Trey Swann, this was largely possible thanks to the so-called Handshake Deal Protocol conceived by Y Combinator founder Paul Graham in March 2013. According to Swann, the process was ideal: “Fundraising is not winning. The goal is to get it over with quickly and get back to work,” he said.
Along with Y Combinator, TrueVault’s investors now include FundersClub, Paul Buchheit, ScoreBig founder Joel Milne, an LLC that includes Andreessen Horowitz, General Catalyst, Maverick, and Khosla Ventures, and Immunity Project founders
Reid Rubsamen, Naveen Jain, and Ian Cinnamon.