Four years ago in Henan, China, a baby boy weighing only two pounds was abandoned at a street corner. A Beijing orphanage took him in, but he seemed fated to be one of the three million premature babies who die annually worldwide in their first month of life because they lack enough body fat to keep warm. Luckily, the orphanage had just received an Embrace infant warmer, a low-cost medical device that acts like an incubator. The orphanage kept "Baby Long" in the Embrace for a month. A year later, a family in Chicago adopted him. Today, Nathan is a healthy toddler.

The Embrace is the brainchild of Jane Chen and her partners, Rahul Panicker, Linus Liang, Razmig Hovaghimian, and Naganand Murty. It contains an insert made of a waxlike substance that can maintain a temperature of 98.6 degrees for eight hours. It's simple to use, and doesn't require electricity. Chen met her co-founders in a  Stanford design class in 2008, where they were challenged to create a medical device that costs just 1 percent of what a typical incubator does, to service impoverished countries. After research trips to Nepal and India, the team had a working prototype. They won two business-plan competitions right before Chen graduated, and what had been a class project became a startup with $125,000 in seed capital. "No one thought we were going to do this as a career," Chen says. "But by the end of the course, we all felt like we had a product that could make a difference, and we thought, if we don't do it, who will?"

Embrace released its warmer in 2011 and partnered with nonprofits and hospitals to get it to people in need. To date, the device has helped save more than 200,000 premature babies in Africa, Asia, and Latin America. But Chen knew Embrace needed a reliable revenue stream, so in December, the company launched its first for-profit product, the Little Lotus, a swaddle made of the same temperature-controlling fabric used in NASA spacesuits. For each Little Lotus sold, the company gives money to nonprofit partners--enough to save a single baby with the reusable Embrace (it covers shipping, logistics, and training costs). Little Lotus revenue will exceed $1 million in 2016, says Chen. "A public health professor of mine at Stanford said, 'The death of a child is a tragedy, but the death of a child from a preventable cause is an injustice,'" she recalls. "Those words have always rung so true to me."

From the May 2016 issue of Inc. magazine