Active Venture Capital Investors in FinTech

When the unexpected global Covid-19 pandemic started in early 2019, it temporarily brought the world economy to an abrupt standstill. It also exposed the inadequacies of almost every country’s health care system’s ability to control a fast-spreading pandemic.

As governments, health systems and businesses scrambled to contend with the crisis, a renewed interest in health related technologies and initiatives that might provide solutions came to the forefront. It suddenly became clearly apparent that innovation needed to move forward at a faster pace. Amid the economic headwinds, Venture Capital firms and investors saw potential value in all areas of wellness and health innovation. Healthtech is the fastest growing vertical in the healthcare sector. It includes any technology-enabled healthcare product and service delivered outside of a hospital, clinic or doctor’s office except for medical related management software.

Well-being and care delivery innovators are leveraging the Internet of Things (IoT) more than other technologies. Data and platform innovators are focused on Artificial Intelligence (AI) and Machine Learning (ML). They are expected to address back-office solutions, such as reporting, data collection, prior authorization, revenue cycle management, and interoperability solutions. Innovative scientific discoveries including Nanomedicine will further the diagnosis and treatment of both life-threatening diseases but cronic quality-of-life conditions. The lure of investing in Healthtech and MedTech will continue to grow for a number of reasons. Deloitte's 2019 Global Health Care Outlook report predicts that global healthcare spending will increase by at least 5.4% yearly over the next three years and potentially reach US$10Trillion by 2023. The report cites increased use of exponential technologies and entry of disruptive and non-traditional competitors to health care as part of the main driving force behind the sectors's continued growth. A good example is the dramatic increase in the use of telemedicine brought on by the covid restrictions and improvements in internet speed and more affordable VoIP capabilities.

Healthcare technology investment soared 47% in 2020, to a new high of US$51B. Nanomedicine investment alone grew by 250% in the last five years, according to Pitchbook.They also reported that equity funding to digital health companies hit an yearly high of $26.5 billion. No doubt that the world needs this major boost to avoid being caught again by future pandemics, this investment is creating new opportunities to democratise and to decentralise healthcare by transforming global health through early detection diagnostics, precision medicine and timely intervention therapies.

Internationally, there are old-line and new Venture Capital firms meeting the challenges of future healthcare and prevention with aggressive funding and support to innovative entrepreneurs. Below is a list of Venture Capital companies and funds that primarily support healthcare startups and have a majority of their investments in the HealthTech/MedTech sector.

Brandon Capital Partners

Founded in 2006 by Chris Nave and Henry Thompson, Brandon Capital Partners is an exclusively HealthTech venture capital firm based in Melbourne, Australia. The firm makes minority seed, early-stage, and later-stage investments. The firm prefers to invest in pharmaceuticals, biotechnology, healthcare devices and supplies, life sciences, digital health, HealthTech, Oncology, and medical equipment manufacturing sectors primarily in Australia and New Zealand. They prefer to invest early and have been the lead investor for most of their current portfolio companies. They have made 31 investments using 3 funds since 2008 with 8 as Lead Investor. They have had 3 exits.

Brandon Capital Partners also manages the Medical Research Commercialisation Fund (MRCF). It is the largest life science investment fund in Australia and New Zealand. MRCF is a collaboration between major Australian pension funds, the Australian and New Zealand governments, all Australian state governments and over 50 leading medical research institutes and research hospitals. They have made 24 investments since 2008 being the Lead Investor in 7. All investments are HealthTech oriented.

MPM Capital

MPM Capital is a healthcare investment firm founded in 1996 and headquartered in Cambridge, Massachusetts. It was founded by Ansbert Gadicke and Luke Evnin to invest in early-stage companies developing innovative therapeutic technologies across multiple therapeutic areas including oncology, immunology, and neuroscience as well as emerging modalities of the cell, gene, and nucleic acid therapies. The firm is founding and investing in life sciences companies both public and private that seek to cure major diseases by translating scientific innovations into positive clinical outcomes. The experienced and dedicated group of Investment Professionals and Executive Partners strives to power novel medical breakthroughs that transform patients’ lives.

MPM continuously seeks new ways to invest in order to enable breakthroughs and cures for major diseases. They manage the UBS Oncology Impact Fund which is an oncology-only private and public equities fund that donates a portion of profits and royalties to cancer care and research. They also manage a philanthropic-investment vehicle involving the Dana-Farber Cancer Institute (DFCI) to advance cancer research. This unique philanthropy-investment endeavor provides DFCI with potential new philanthropic resources and gives MPM Capital early insight into projects with commercial potential. Since 1996 MPM Capital all of their 276 investments have been HealthTech related with the majority in biotechnology and healthcare industries. They have been Lead Investor in 87 rounds and have had 84 exits.

Rock Health

Rock Health was the first full-service seed fund to invest and support startups working exclusively in digital health. It exists to fund and support entrepreneurs working in HealthTech, where healthcare and technology. Rock Health was founded in San Francisco, California in 2010 by Darren Hite, Halle Tecco and Nate Gross. The fund offers funding, access to legal and corporate partners, office and medical space to its portfolio companies. Their experts emphasize that they act as an early employee, not as an advisor or mentor. That means getting their hands dirty doing actual work. They support their companies on a range of business issues, including fundraising, market planning, customer development, business development, contracting, pricing, communications and public relations. Since 2010 Rock Health has made 106 investments exclusively in HealthTech. More importantly, their community of founders give back to the Rock Health network with continued support of new companies. In addition, Rock Health sponsors the Rock Health Summit , a two-day digital health conference which brings together as many as 600 big thinkers and bright minds in the digital health ecosystem for meaningful discussions involving healthcare’s biggest challenges.

BoxGroup

BoxGroup was founded in New York City in 2009 by Adam Rothenberg and David Tisch. The fund invests primarily in software and HealthTech companies but has made investments in the consumer, enterprise, fintech, healthcare, life science, and marketplace industries as early as the pre-seed round and as late as Series A. Unlike many other Venture Capital companies BoxGroup makes investments at the pre-seed round or earlier. They will continue to invest in subsequent rounds to stay involved and assist entrepreneurs as their companies grow. They successfully formed their first fund with outside investors in late 2019 after years of micro funding and a few missed opportunities. They have made a total of 490 investments, 46 of them in HealthTech companies. They have had 93 exits.

Khosla Ventures

Khosla Ventures is a venture capital firm based in Menlo Park, California. The firm was founded in 2004 by Vinod Khosla, legendary entrepreneur and founder of Sun Microsystems, along with David Weiden and Samir Kaul. Khosla Ventures makes investments in early stage companies operating primarily in the software, health care, biotechnology, sustainability and big data-AI sectors. They have made a total of 920 investments with 323 as Lead Investors. They have made over 177 investments in HealthTech, Biotechnology and HealthTech companies. Khosla Ventures bears the interests of Vinod’s passion for mentoring founders and entrepreneurs. The firm invests in projects which will have a beneficial impact on people’s health and environment.

New Enterprise Associates (NEA)

The firm is headquartered in Menlo Park, California and Washington, D.C.with additional offices in Baltimore, Bangalore, Beijing, Boston, Mumbai, New York City, San Francisco and Shanghai. NEA was founded in 1977 by Richard Kramlich, Chuck Newhall and Frank Bonsal, all experienced venture capitalists. They are one of the largest independent VC’s in the world. Aside from software companies their primary investments have been in HealthTech including Biotechnology and Medical sectors. They have made over 1,950 investments with 658 as Lead Investors. They have seen 521 exits. NEA’s investment strategy takes in all stages of a startup's growth beginning with seed in emerging markets to funding early-stage companies in high-growth markets to maintaining the growth of market leaders. Their size and experience provides a vast network of resources, expertise and mentors from around the world in appropriate disciplines.

Blue Venture Fund

Blue Venture Fund, an innovative corporate venture fund formed by the 36 independent Blue Cross Blue Shield Plans (BCBS), is headquartered in Chicago and was formed in 2008 with an initial investment of US$500M. The fund is managed by Sandbox Industries, a venture capital firm that works at the intersection between entrepreneurial thinking and large corporate enterprises. Sandbox is the exclusive partner with BSBC and operates an accelerator program with them called Healthbox. The Fund invests exclusively in HealthTech related companies at all stages of development, pre-seed to later-stage rounds.The fund has made 74 investments since 2008 with 26 of them as Lead Investor. They have had 16 exits. The Blue Venture Fund is focused on innovating in the healthcare industry which is under pressure to make major changes. It is experiencing unprecedented change with the implementation of the Affordable Care Act in the US, the expansion of retail healthcare, the creation of new provider payment models and the rapid change in medical technology and the delivery of care. The insurance industry is in the middle of these changes and will be affected by all of them.

HealthTech Capital

HealthTech Capital is an Angel group of private investors dedicated to funding and mentoring new HealthTech startups at the crossroads of healthcare and the innovative software - mobility worlds. HealthTech Capital is creating a new ecosystem with leading- edge clinical providers, venture firms and other strategic health industry participants. healthTech Capital was formed in 2010 by Anne DeGheest and Laura Fay with headquarters in Los Altos, California. HealthTech Capital is a unique VC firm setup as a membership organization with Accredited Angel Investors, Healthcare Companies plus Venture and Corporate Investors. The goal is to invest and mentor emerging innovative health care and biotechnology startups. Recently, they have been selecting between 1 and 3 companies to join a 3 month virtual accelerator type program. Since 2010 they have made 65 investments with 9 as lead investor. They have had 7 exits.

Karista

Of the more than 626 active digital health sector companies in Europe, 63% were founded in the last five years. Karista has published an e-health mapping document, available on their website, to encourage more funds to invest in this promising sector. Karista is an early-stage venture capital firm based in Paris, France that invests in ambitious health, digital, and technology startups. Founded in 2001 as CapDesif Management, by Olivier Dubuisson, Catherine Bouleas, Yvan-Michel Ehkirch and others, they have made 117 investments in more than 95 companies with 26 exits. Because they believe that investment is not only about money but mainly about people, they provide support to very-early stage, seed through Series B founders and entrepreneurs. They are active primarily in France, in particular, and Europe.

Vector Innovation Fund (VIF)

Vector Innovation Fund is not a Venture Capital firm per say; but, an umbrella Reserved Alternative Investment Fund established in 2020 to invest in pandemic protection and to support global healthcare, sustainability and longevity. The fund and its managers are headquartered in Luxembourg. It has set up a group of sub-funds to target commitments to companies involved in long-term, innovative solutions to the transformation of global healthcare. The first sub-fund of VIF is the Pandemic Protection Fund. The fund plans to invest in sophisticated biotech and nanotechnology-based diagnostics, biomarkers, vaccines, novel therapies, highly targeted nanomedicines, and AI, which they believe will allow for a more sustainable, digitised, decentralised and democratised point-of-care environment. The Vector Innovation Fund has not made any investments at the time of this writing.

Connecticut Innovators

Connecticut Innovations is a quasi-public venture capital firm that was founded in 1989, in New Haven, Connecticut. The firm prefers to make minority investments in seed, early-stage, and later-stage companies operating in the SaaS, manufacturing, nanotechnology, life sciences, oncology, big data sectors from the state of Connecticut, the United States. Our funding has supported research, development, commercialization and marketing efforts in 83 emerging companies, leveraged over $1 billion of additional investment into Connecticut from over 60 private investors.

F-Prime Capital Partners

Fidelity Biosciences and Devonshire Investors combined to form a global venture capital firm investing in life sciences, healthcare and technology. Since 1969, F-Prime has worked closely with entrepreneurs and academics to create innovative solutions to some of the world's most significant challenges in healthcare and technology. Working with East Asian firm Eight Roads, they provide an international perspective plus world-wide resources that few venture firms can match. With the resources of Fidelity Investments, the pressure of fundraising does not exist. This allows F-Prine to focus on finding and helping entrepreneurs build useful healthcare companies.

Optum Ventures2

Similar to the Blue Venture Fund, insurance giant UnitedHealthcare Group launched its venture capital arm, Optum Ventures2 by their Optum division in 2017. Though a late entrant into venture funding compared to its peers, Optum Ventures has grown rapidly. Starting with a US$250 million fund and four investments in 2017, by 2021 they have invested in over 50 innovators. In 2020, Optum Ventures was one of the most active Corporate Venture Funds overall, While investing in a diverse set of innovators including care management, virtual-care delivery, diagnosis and disease management, the common denominator is data and technology platforms used as a means to serve various healthcare and well-being needs. As of 3rd Quarter 2012 they have made a total of 52 investments, 24 of them inas Lead Investor. They have had 3 exits.

A Final Note. . .

For HealthTech participants the long-term global goal is to create a more sustainable point-of-care healthcare system that is more affordable and available to everyone. With the forced requirement for immediate covid-19 preventative measures, some experts suggest the sector has advanced 10 years in the first six months of 2020. These advancements are providing wider applications and making an impact on global health. It is hoped that this is a trend that will continue for the next 10 years, now being called by some as the “COVID decade”. A good example is the development and widespread use of over-the-counter covid testing. By mid-2021 rapid covid tests have become commonplace in the developed world. Innovative startups are working to expand this trend to help society fight other forms of disease such as the flu as other diseases expected to occur as the climate continues to change.