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Digital health has waited – for a very long time – to be taken seriously by investors; I suspect the moment has finally arrived.
To get a sense of why, consider the strategy associated with the just-announced hire by Aberdare Ventures of Dr. Mohit Kaushal, an appointment discussed intelligently both by my colleague Zina Moukheiber here, and by Brian Dolan of MobiHealthNews here.
“Mo’s joining is sort of a capstone of a recent aggressive period of strategic evolution for us,” Aberdere’s founding partner, Paul Kligenstein told Dolan, who continues,
“Klingenstein explained that Aberdare’s investment strategy has changed markedly in recent years, and it’s not a simple shift away from traditional life sciences companies or medical device companies in favor of digital health ones. Klingenstein explains it as a shift away from investments in companies that lead to more expensive, incrementally better healthcare to companies that provide ‘transformational technology’ that ‘tie together to drive efficiency in care for the system, for the individual, and for payers.’
‘If you look at our portfolio today it’s clear these types of companies cover the gamut: information tools to help people take their drugs, information tools to gather data in doctor’s office, sensors that communicate with systems to perform analytics, and information tools to help people do clinical trials to discover drugs better,’ he said.
Klingenstein said their latest investments stand in contrast to the way Aberdare and others investing in healthcare have been doing it for years.”
My sense is that Kaushal at Aberdare and Dr. Bob Kocher at Venrockrepresent the next incarnation of healthcare venture capitalists – joining a select group of investors including Lisa Suennen of Psilos , Dr. Bijan Salehizadeh of NaviMed, Steven Kraus of Bessemer, Todd Pietri of Milestone, and Jack Young of Qualcomm, who arguably have all been ahead of the curve here (disclosure: I know both Lisa and Bijan), in the same way that Eric Topoland Paul Sonnier have been out in front on the adoption and dissemination side.
Further evidence for digital health’s emergence may be found in today’s announcement - at the high-profile “D-Dive Into Mobile” Conference – of a new digital health company, called Better, founded by Geoff Clapp (who I also know – though I only learned today what he’s been up to).
Better – which apparently seeks to help patients access health information, and potentially services, through a relationship with the Mayo Clinic - is significant not so much because of the vision (perhaps promising, though it’s far too early to get a sense of whether or not the approach will succeed), but because of its founder – Clapp – and its funder – “Social+Capital Partnership” (S+C).
Clapp, the former CTO of HealthHero, has been what might be described as the unofficial “operations” partner at Rock Health, providing vital mentorship to the many companies associated with this digital health incubator. He obviously has been immersed in the space for quite a while, and his decision to jump into the mix as a founder suggests the opportunity he’s identified cleared a sophisticated critical bar.
Meanwhile, S+C – the fund started by former Facebook VP Chamath Palihapitiya – seems to be the Valley VC of the moment, enjoying the sort of buzz most recently experienced by the likes of Andreessen-Horowitz and Founders Fund. It has not shied away from healthcare technology and services, investing in Asthmapolis, Syapse, Glooko, and Flatiron Health.
Notably, S+C recently raised their second fund, and the Mayo Clinic was reported by TechCrunch to be one of their LPs. Palihapitiya’s stated investment goal is to create social as well as financial returns, and it’s encouraging to see that digital health is now recognized as an area where both may be possible.
It will be even more encouraging when (not “if”) the results – measured by both health and dollars – validate this bold, optimistic thesis.
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