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Dakim Inc., a developer of software and systems to help seniors retain brainpower, raised $10.6 million in Series C funding led by Galen Partners to market its products to care facilities and to launch new ones for home use. The deal follows about $5 million in previous equity capital from angel investors since the company was founded in 2001, and is likely to be Dakim's final private round. The new money will advance sales of the company's touch screen-based hardware and software products first launched in November 2006, and continue development of Web-based content for subscribers. Dakim founder and CEO Dan Michel said the company developed the product by working with neurologists and psychologists to adapt research on brain function and aging to design puzzles, games and other tools to exercise aging brains. By creating entertaining content to exercise the brain, Dakim can offer customized "workouts" that build neurons and synapses in much the same way that regular physical workouts help seniors build muscle mass to ease the aging of the body, he said. "We're dedicated to marrying technology, science and creativity in developing systems to use rigorous brain activity to build cognitive reserves," Michel said. "Evidence is that people who stay cognitively active are constantly building new neurons and synapses to offset losses in old age." Dakim's products are aimed across the spectrum of brain health in old age, with five levels of cognitive difficulty to serve seniors already suffering from Alzheimer's disease or dementia, to those with highly functioning brains. Michel compared the effects of exercising using the Dakim system to the benefits seniors get from playing bridge or chess or practicing a musical instrument, but said the system can provide additional stimulation for seniors already engaged in those activities. Michel said the company built its system around a proprietary touch-screen hardware platform to avoid the traditional mouse and keyboard interface that can be intimidating to seniors who have spent much of their lives without computers. But he said the company is working on development of personal computer- and set-top box-based systems to take advantage of both richer media delivery infrastructure and the aging of more technology-savvy baby boomers. Dakim's current product aimed at senior care facilities sells for $6,000 and includes an annual subscription fee based on 20 users. The company will introduce a home product this spring for $2,500 with a license for two users. David Jahns, a managing director with Galen Partners in Stamford, Conn., said his firm specializes in healthcare, but has made a number of consumer-oriented investments in information technology-enabled training, compliance or education companies focused on healthcare industry customers. Galen invested in Princeton, N.J.-based EduNeering Inc. which provides e-learning software and programs for training employees in the pharmaceutical industry and was sold last year to the Kaplan Inc. education unit of the Washington Post Co. Jahns said Galen came to the investment through venture partner Bill Williams, a former CEO of the Pyxis healthcare automation unit of Dublin, Ohio-based Cardinal Health Inc., and that Williams will join Dakim's board and assist the company with sales and marketing. Dakim will reserve the option of raising additional money if its growth warrants faster expansion, Michel said. However, the company is close to profitability, Jahns said, adding that he expects the current investment to be sufficient to address a rapidly expanding market. "The unmet need for brain fitness products is significant and rapidly growing," Jahns said. "We believe we can leverage the company's vast creativity and capability in developing cognitive fitness systems that are effective and fun to use in order todevelop new expansion markets such as brain injury rehabilitation and healthy aging home use." Michel said the company did not use an outside financial adviser in assembling the round; Santa Monica, Calif.-based Dakim received legal counsel from Russ Hansen of Gibson, Dunn & Crutcher LLP in Palo Alto, Calif.
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