Digital health is expected to attract more attention from venture capitalists in the not-too-distant future
Jerusalem-based equity crowdfunding company OurCrowd is launching a new fund focused on digital health called Qure which will look to invest in Israeli companies at seed stage and Series A. The fund will be be worth $50 million, OurCrowd told Geektime.
“Digital health is one of the fastest growing sectors in terms of funding and M&A activity,” said OurCrowd CEO Jon Medved. “Exclusively focusing in digital health is important given the complexity of healthcare delivery and markets.”
The fund is a product of collaboration with Johns Hopkins and will be managed by Dr. Yossi Bahagon and Allen Kamer. Bahagon is the Founder and former CEO of digital medicine startup Luminox Health, which OurCrowd acquired earlier this year. Kamer is co-founder of health analytics startup Humedica, which United Health acquired in 2013.
“We are delighted that Allen and Yossi will be joining the team and bringing their extensive healthcare management and entrepreneurial experience to the fund,” added Medved. “Sophisticated investors are seeking an array of avenues to deploy their capital. We believe offering a sector fund dedicated exclusively to investing in digital health companies that is connected to the OurCrowd platform offers a unique capability that is highly attractive.”
“We are excited about the opportunity to collaborate with OurCrowd to bring new companies and novel ideas to market,” said Johns Hopkins Technology Ventures’ adviser Christy Wyskiel. “We feel these companies will enrich the innovation ecosystem in and around Johns Hopkins.”
Startup analysts at CB Insights expected 2016 would see more corporate giants launch VC arms dedicated to digital health, and that prediction has seemed to bear fruit. Recently, DC-based incubator 1776 launched a project with Accenture to incubate more such companies while Orbimed launched two new funds over the past year: one worth $1 billion and another $300 million.
“I am excited to join the OurCrowd team and to collaborate with Dr. Bahagon to launch this Fund,” Kamer commented. “Digital health solutions are more necessary than ever as the global population ages and healthcare demands accelerate quickly while supplies and services fail to keep pace. Digital health solutions offer the promise of delivering more for less and aim to positively impact the health of current and future generations.”
A report by Startup Health released last month estimated the value of all digital health deals through the first three quarters of 2016 was $6.5 billion. A report by Silicon Valley Bank claims 40% of investments over the last couple years came from Qualcomm Ventures, Merck Global Health Innovation Fund, Google Ventures, GE Ventures, BlueCross Blue Shield Venture Partners, and Cambia.
“Digital health is starting to transform our lives. It is fundamentally about making medicine more personalized and comprehensive, empowering both patients and their medical teams,” said Bahagon. “The fund will focus on solutions that have a massive social and personal impact, while also offering highly attractive return potential over an appealing timeline.”