AI Startup Cardiocol Seeks Bankruptcy Protection Amid Funding Crisis
Cardiocol, an Israeli startup founded in 2017 that developed AI technology to analyze phone calls for early detection of atrial fibrillation and stroke prevention in elderly patients, has filed for bankruptcy protection at the Central District Court. The company created an automatic, user-transparent system that operates during routine calls to identify heart rhythm disorders, potentially preventing over 70% of related medical complications. Cardiocol also developed a smartphone app for long-term monitoring, holds patents in the US, Japan, and Israel, and built a large clinical database with hundreds of thousands of voice recordings synchronized with ECG signals collected in collaboration with leading hospitals.
Despite its medical innovation, Cardiocol has struggled financially since 2023, failing to secure funding needed to conduct commercial pilots agreed upon with strategic clients in Europe and Asia. This funding shortfall forced the company to gradually downsize, leading to most employees and managers leaving by the end of 2024. According to the bankruptcy filing submitted by attorney Shay Bar Nir from Piron & Co., Cardiocol has accumulated losses exceeding 19 million shekels and faces ongoing liabilities surpassing 379,000 shekels by the end of 2024. The company also has a contingent liability of approximately $1.89 million to the Israeli Innovation Authority for grants received.
In recent months, Cardiocol's operations have been financed through loans from some of its founders and primarily from its largest shareholder, the French health investment fund KMT, which provided loans to preserve the company's assets. The bankruptcy protection request aims to manage the company’s financial distress while exploring possible restructuring or sale options.
