HealthNotes Online Gets Venture Funding for Product Rollout and Growth

PORTLAND, OR—Natural health information provider HealthNotes Online has completed its financing deal with Catalyst II, a New York City-based venture capital fund, and will roll out systems to hundreds of retail grocery and pharmacy outlets by the end of 1999, the company says.

The agreement, financial terms of which have not been disclosed, gives Catalyst a minority stake in HealthNotes Online and gives Catalyst principals Jill Higgins and David Cole seats on HealthNotes’ board, according to Skye Lininger, HealthNotes Online’s president and CEO. A majority of the company’s stock and control of its board of directors remains with HealthNotes co-founder Lininger.

HealthNotes sells its database software, which contains information on vitamins, supplements, 100 OTC drugs and 200 prescription medicines and is designed for both consumers and medical professionals, to pharmacies and food and vitamin retailers nationwide. A so-called turnkey system contains a computer and touch-screen monitor, a laser printer, and a one-year license to HealthNotes’ software. The system sells for $3,495. A one-year license to the software alone costs $695. Annual license renewals are $295.

Systems will be in place in all Wild Oats Markets (OATS) retail outlets by the end of February 1999. They will be in 30 of southern CA-based Ralph’s grocery stores by the end of the year and will be in all Fred Meyers’ remodeled and new stores. Systems also in place by year’s end include those in about 100 GNC vitamin and supplements stores in Canada. Pharma-ceutical distributors Bergen Brunswig and Cardinal Health also have purchased HealthNotes’ software, and systems are being installed on an ongoing basis in Smiths, Vitamin Shoppes and Vitamin Superstores, Lininger says.

HealthNotes plans two more releases of its database software within the next two quarters.