In 'Entrepreneurial Spirit,' we delve into the reasons people started their businesses, the initial challenges they faced, and their aspirations for the future.
In our 44th installment, we interviewed Kazuhiro Terashima, CEO of CaTe inc., along with insights from Yuki Yamazaki, JAFCO's investment professional in charge, about the challenges the company will face in the future.
【Profile】
Kazuhiro Terashima, President & CEO of CaTe inc.
2011: Graduated from Nagoya University School of Medicine
Completed residency at Tokyo Metropolitan Tama General Medical Center
Cardiovascular Medicine training at Nagoya Daiichi Hospital and Sakakibara Heart Institute
2020: Founded CaTe inc., became CEO
2021: Head of Cardiovascular Medicine, JR Tokyo General Hospital
2023: Assistant Professor, Cardiovascular Medicine, Fujita Health University
Credentials: Cardiovascular Specialist; Certified by the Japanese Association of Cardiovascular Intervention and Therapeutics (CVIT); Cardiac Rehabilitation Instructor; Certified Internal Medicine Specialist; Certified Primary Care Physician; Certified Occupational Health Physician (Japan Medical Association)
【About CaTe inc.】
CaTe develops a rehabilitation app to support at-home outpatient cardiac rehabilitation. The app promotes comprehensive cardiac rehabilitation by providing exercise therapy, sharing daily vital data (such as pulse, blood pressure, and body temperature), managing lifestyle and diet, and delivering notifications and messages powered by AI to encourage behavioral change in patients.
Portfolio
Aiming for a society where all cardiac patients receive better medical care through Remote Cardiac Rehabilitation System
─ Please tell us about CaTe's business.
Terashima At CaTe, we are developing a therapeutic app to support cardiac patients, such as those with heart failure or myocardial infarction, to perform appropriate cardiac rehabilitation at home. By using smartphones and IoT devices like smartwatches, the app provides personalized exercise programs for each patient, enabling safe and effective cardiac rehabilitation.
Additionally, the app offers various features to encourage behavioral change, such as exercise therapy, sharing daily vital data, managing lifestyle and diet, and AI-driven notifications and chat functions, providing comprehensive cardiac rehabilitation.
We believe that by implementing this Remote Cardiac Rehabilitation System into society early, we can solve the challenges cardiac rehabilitation faces and make a significant impact on society.
─ What are the challenges facing cardiac rehabilitation?
Terashima One major issue is the low participation rate in cardiac rehabilitation among cardiac patients.
Cardiac rehabilitation, which primarily involves exercise therapy for cardiac patients, has been proven in studies to have the same therapeutic effect as medication. For example, if heart failure patients receive appropriate exercise therapy after discharge, the rate of rehospitalization drops by about 30%, and the mortality rate from heart disease in myocardial infarction patients drops by about 30%. However, in Japan, the participation rate in cardiac rehabilitation is extremely low, currently standing at around 4-8%.
─ That's shockingly low. Why hasn't it become more widespread despite its proven effectiveness?
Terashima There are several reasons. One issue on the patient side is the burden of frequent hospital visits. Cardiac rehabilitation is usually offered at the same limited times as regular medical consultations, so continuing to attend three times a week at designated times is a significant burden, not only for the patient but also for their family members who may need to accompany them. Many patients find it difficult to continue and eventually stop attending. Furthermore, many facilities have reduced or suspended outpatient cardiac rehabilitation due to the impact of the COVID-19 pandemic in recent years.
On the facility side, the challenges are the lack of rehabilitation facilities and shortage of practitioners. Currently, there are only about 700 cardiac rehabilitation facilities across Japan. Given that around 290,000 patients are hospitalized for heart failure each year, there is a significant shortfall. In addition, there is a shortage of qualified personnel.
─ In other words, patients with heart disease are not receiving adequate medical care.
Terashima That's exactly right. As a result, the recurrence rate of heart failure increases, leading to more emergency visits and rehospitalizations, which increases the overall burden of medical costs on society.
CaTe aims to address precisely this issue. By developing an unprecedented Remote Cardiac Rehabilitation System, we support patients in recovering their exercise tolerance and improving their lifestyle habits, thereby reducing the risk of recurrence. Our goal is to create a society where all cardiac patients receive better medical care.
─ Could you tell us more about the unprecedented Remote Cardiac Rehabilitation System"?
Terashima In the past, there hasn't been a system that's easy to use at home and is an optimal exercise therapy. Some services use IoT ergometers for remote cardiac rehabilitation, but the high cost, weight, and size of the devices are significant challenges. Other services involve following exercise videos on smartphones, but they lack proper load control, resulting in insufficient effectiveness. Furthermore, since these services are not covered by insurance, the cost burden on patients is substantial, and there are issues with coordination with medical institutions.
Our Remote Cardiac Rehabilitation System resolves all these issues. CaTe's system is unique in that patients can perform exercises without using equipment like ergometers and still maintain consistent and optimal exercise load. This is one of our strongest advantages.
─ What inspired you to create the Remote Cardiac Rehabilitation System?
Terashima I started my career as a cardiologist. After graduating from Nagoya University School of Medicine, I worked as a cardiologist in hospitals in Tokyo and Nagoya. I'm currently in my 14th year as a physician, still working at a university hospital. During this time, I strongly felt that, despite heart disease being a life-threatening condition, we weren't doing enough to promote behavioral changes in patients after discharge.
Even if I successfully treated a patient who had been brought in with their heart stopped and they recovered and were discharged, their condition would soon worsen, and they would be readmitted. I've experienced many such cases. Of course, we manage patients after discharge in outpatient clinics. We provide not only medication but also guidance on exercise and diet, but simply conveying this in outpatient settings does not have a significant impact. Many patients who initially attend outpatient cardiac rehabilitation gradually stop coming.
I wondered if there was some way to address this issue. Could we leverage smartphones, which patients interact with every day, to manage and encourage behavioral changes in cardiac patients? That was the inspiration behind founding CaTe.
─ So, it was your firsthand experience as a physician that led to the idea for this system.
Terashima Yes, exactly. I realized that academic research alone couldn't solve this problem. That's why I believe that collaboration between industry, government, and academia is crucial, and I decided to establish the company. Starting a company while working as a physician came with many challenges, but thanks to the support of various people, we've been able to advance the business this far. I feel that my experience as a doctor, the social challenges I want to solve, and the reliable friends and colleagues I've gained have all come together to create CaTe.
Meeting people who helped the company reach its next stage
CEO Kazuhiro Terashima (left) and investment professional in charge Yuki Yamazaki (right)
─ In June 2023, you completed a Series A first-round close, raising 400 million yen with lead investments from JAFCO and the Tokyo Wellness Impact Fund. Could you tell us about how you first connected with JAFCO?
Terashima My initial contact with JAFCO came through Ms. Yamazaki and Ms. Numata. About six months after raising one hundred million yen in a seed round, they reached out around June 2022, though at the time we decided to revisit the timing later. My first impression of Ms. Yamazaki was her straightforwardness. Since she had just joined the company fresh out of school, her serious and diligent approach left a lasting impression.
Yamazaki What drew me to CaTe was the potential of its digital therapeutics (DTx) business. With the significant number of heart disease patients and the depth of the challenges they face, providing a solution could bridge critical treatment gaps and reduce healthcare costs, making a substantial social impact. Furthermore, the treatment approach intrigued me. Focusing on exercise therapy, which allows treatment outside of a doctor's supervision, represents a broader and impactful area. Around fall 2022, we received an opportunity to discuss moving forward towards Series A, and both Ms. Numata and I participated in a meeting.
─ What was the deciding factor for you to choose JAFCO?
Terashima While having JAFCO, a top-tier domestic VC, on board was obviously beneficial, the decisive factor was that both investment professionals genuinely engaged with CaTe's business.
Ms. Numata and Ms. Yamazaki truly exemplify tenacity. They exhibit a level of dedication akin to that of entrepreneurs themselves. They offer precise advice, like informing us what's really important and what's challenging, supporting us until the very end. Through our conversations, I sincerely felt that with them as our allies, our company could reach the next stage.
Yamazaki Thank you for saying that! I'm happy to hear it. Since the funding in June 2023, we've held monthly meetings. I regularly meet with you, along with your CTO and CFO, and each time I think you are such a great team.
With your experience as a physician, your CTO's expertise as a full-stack engineer, and your CFO's background in strategy consulting, private equity, and as CFO for other companies, you respect each other and bring out your best performance. Together, you're steadily building CaTe up as a company.
Advancing Japanese healthcare, broadening DTx to all proven therapeutic areas
─ What are your plans for the future?
Terashima With the funds we've raised, we aim to enhance our development of a remote cardiac rehabilitation system, conduct clinical trials, and pursue insurance coverage. Since May 2023, we have begun a doctor-led trial at Fujita Health University Hospital for a cardiac rehabilitation device program.
Our goal for system development is to enhance gamification. Even if effective home-based exercise therapy becomes readily accessible, it's difficult for heart disease patients to continue unless they are motivated to do so. That's why adding an enjoyable, engaging, and motivating game element is essential. For instance, AI could provide real-time feedback, like, "You're lifting your legs too high" or "Slow down your pace." Creating a system to improve adherence to appropriate exercise therapy is our focus for the next year or two.
─ Is this the next step after recommending suitable treatments?
Terashima Exactly. Today's DTx is limited to digital advice on daily diet and exercise videos, so the effect is still weak. True DTx, I believe, is about digitalizing appropriate exercise therapy.
Our first goal is to use an app to enable exercise therapy and behavioral changes for cardiac patients. Proving the treatment's efficacy could lead to its use as a medical device or covered under insurance, lowering the adoption barrier for healthcare providers. Establishing a solid share in cardiac rehabilitation could also serve as a springboard into further DTx domains. 
─ And what lies beyond this phase of DTx?
Terashima Exercise therapy has been shown effective for many conditions beyond heart disease. It could also benefit patients with hypertension, diabetes, dementia, depression, and even malignant tumors.
Currently, we have strong partnerships with medical institutions like Fujita Health University and Nagoya University for clinical research. We plan to deepen our collaboration and expand our target areas, starting with cardiac rehabilitation to push Japanese healthcare forward. CaTe aims to lead the domestic DTx market and create a healthier, more vibrant society.
Comments from the investment professional in charge, Yuki Yamazaki
Although the number of cardiac patients is on the rise in our super-aging society, participation in outpatient cardiac rehabilitation is low due to the burden of hospital visits caused by work and family commitments. To address this issue, CaTe is developing an application for cardiac rehabilitation therapy that allows patients to safely receive exercise therapy with only a general-purpose device and without the supervision of a physician. We believe that CaTe will be a leader in the DTx market in Japan, and in the future, we are looking at a pipeline of other diseases where exercise therapy has been proven to be effective. Together with CaTe, we will do our utmost to advance the Japanese healthcare industry in the next 10 years.
