According to the Ukrainian Center for Medical Statistics, an average of 97.5 thousand Ukrainians suffer from musculoskeletal injuries annually. The war has significantly increased these numbers. However, according to experts, a sedentary lifestyle may also substantially worsen the condition of bones, joints, and muscles. According to data reports, one in ten people suffers from back pain, primarily due to a lack of physical activity.
Post-injury rehabilitation may be unsuccessful due to either insufficient or excessive physical activity. It may result in the injured area’s malfunction or even tissue death, leading to disability and negatively affecting the quality of life. To avoid negative consequences, a patient needs properly selected exercises, tutoring on how to perform them, and pain education. Of course, it’s important to keep patients motivated. After all, back issues will not go away on their own.
Founders: Svitlana Malovana, Alex Radovichenko
Location: Kyiv, Ukraine
When entertainment heals…
Sometimes innovative ideas appear out of the blue and are brought on by something completely unrelated, just like with Svitlana Malovana. For two years, she provided legal advice to technological companies until she decided to create her own startup. In 2016, together with developer Alex Radovichenko and engineers Vitalii Tolkachev and Alexander Chernegov, she founded Raccoon. The company started developing unique VR controllers for video games that would allow the gamer to control the digital steering wheel, weapons, and other gaming accessories with their bare hands. The promotion of the gadget was not progressing as quickly as desired until existing clients presented an opportunity to look at the product from a different angle.
In 2017, Malovana launched a crowdfunding campaign on Kickstarter and shortly afterwards presented a unique controller at the TechCrunch Disrupt conference. There, a boy approached the startup team to thank them for the opportunity to be able to fully participate in the game playing. He had cerebral palsy, so he could not use a mouse or a gamepad. Svitlana Malovana decided to interview people who supported the VR controller on Kickstarter. Survey results showed that most of them had problems with hand mobility. These findings compelled the startup team to pivot and turn the gaming gadget into a means of rehabilitation.
How does it work?
Redesigning a gaming gadget into a medical device for effective rehabilitation is a socially important step. Since physical therapy is not usually covered by insurance and is expensive, an innovative device could make rehabilitation much more affordable. In addition, some countries lack specialists, so the waiting time to see a physical or occupational therapist could be very long. Often patients have to wait for months to get help while suffering from pain and other inconveniences. Therefore, the decision to modify the startup’s product was of high value and promised a good outcome.
The technology was to be a combination of hardware and software. Svitlana Malovana states that a hardware product works better with a proprietary application. In addition, it increases both customer loyalty and sales.
The hardware device consisted of several sensors that would attach to the wrists and shoulders. As the user performs various therapeutic exercises, the sensors transmit data into the application to track and ensure the exercises were performed correctly. A doctor would control the exercise regimen on their end; an option to chat with a doctor was also available within the application. A user could also share access to the data with their family members.
The startup team selected Germany and Poland as target markets, deciding on Germany for the initial launch. The Raccoon team has participated in startup acceleration programs in Germany, which provided favorable conditions for a successful launch.
Despite the notorious German bureaucracy, the procedure for filing documents is clear, although neither simple nor convenient. Telemedicine and the startup ecosystem are rapidly developing there. The Covid pandemic also helped advance the technological development of remote access to services. Germans tend to visit medical facilities relatively often. For example, people over the age of 50 go to the doctor an average of 14 times a year.
Nevertheless, active partnership with German hospitals was not bringing significant profit. The development of Raccoon technology required considerable financial infusions and constant re-registration. It was the bureaucratic process that became the main obstacle. Months-long delays were putting the project on pause, effectively stopping sales.
This could be devastating for a startup, so the team decided to re-pivot. In 2021, Raccoon became an application for therapeutic fitness, focusing on digital physiotherapy, which freed the project from meticulous certification processes and significantly increased the market. Also, the startup abandoned the hardware component. In addition, the team, being well aware of the target audience for physical therapy, decided to focus on the most common problem: back pain.
Raccoon now offers users a variety of interactive programs to manage their back pain, such as posture correction and pain relief. Canadian methodologies became the basis for the concepts of fitness courses. According to Svitlana Malovana, Canada has the most developed methods for working with the body to improve muscle tone and overall health.
The Raccoon app is only available on Android because this operating system provides data analysis of consumer behavior, and developing a multi-platform application requires significant resources. Nevertheless, Raccoon will soon be available for iOS.
So far, the application has been downloaded by 10,000 customers, with 3,000 subscribers using it regularly. Raccoon has recently launched a paid version of the application. One can still use several general programs for free, while a subscription offers an individual plan for $5.99 per month. The personal training program is created based on a client’s questionnaire. Raccoon already has its first paid subscribers.
Malovana names the United States, Canada, and the United Kingdom as their priority markets. There is also considerable organic traffic coming from India, Pakistan, and Nigeria. Svitlana believes that it’s due to the low availability and low quality of medical help in these regions. As a result, digital therapy is in high demand there. However, Svitlana is in no hurry to sell actively in India, Pakistan, and Nigeria. Before scaling there, Raccoon would need to explore the local specifics thoroughly.
Currently, the primary target audience of the application is women; 73% of them are office workers. Another significant segment is mothers with children under three years old.
Startup in Ukraine: what has the war changed?
“We were influenced only by the first three weeks of the war when everyone was in a state of logistical chaos,” the fundraiser said. The Raccoon team was also eager to help with the country’s overall victory. To avoid having to make difficult choices, the startup has specified time to devote both to work and volunteering. Each member of the team found their own role on the humanitarian front. Due to careful planning, the project wasted no time, but it was still affected by the war.
“Because we made a pivot last year, we had financial difficulties,” says Svitlana. In late 2021, the startup launched a crowdfunding campaign that was interrupted by the war. Meanwhile, the project is preparing for a new search for investors. Svitlana is counting on angel investments, as well as trying to raise some funds through Wefunder.
Another urgent need for Raccoon was to increase customer support staff. Recently, the number of subscribers has increased significantly. However, due to the unstable situation in Ukraine, the startup team cannot provide quick feedback to users.
Yet, all these difficulties are temporary. Every situation has a way out; one just has to look for it. The perseverance of the Raccoon team will surely lead the project to success. Meanwhile, Ucluster will continue to write about other inspiring Ukrainian startups.