Wij willen met u aan tafel zitten en in een openhartig gesprek uitvinden welke uitdagingen en vragen er bij u spelen om zo, gezamelijk, tot een beste oplossing te komen. Oftewel, hoe kan de techniek u ondersteunen in plaats van dat u de techniek moet ondersteunen.

The world of healthcare has notoriously been described as “broken” — plagued with high-friction workflows, sky-high costs and convoluted business models.

Over the past several years, a long list of innovative startups and salivating venture investors have pinned their focus on repairing the healthcare industry, but its digital transformation still appears to be in the very early innings. After a record-setting 2018, however, digital health investing continued to reach meteoric heights in 2019.

Mammoth pools of capital have flooded into various sub-verticals and business models, backing collections of new B2B and B2C companies focused on optimizing healthcare workflows, improving healthcare access and offering lower-cost distribution models. Over the past two years, digital health startups have raised well over $ 10 billion in funding across nearly 1,000 deals, according to data from Pitchbook and Crunchbase.

As we close out another strong year for innovation and venture investing in the sector, we asked nine leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in the sector:

Participants discuss trends in digital therapeutics, telehealth, mental health and the latest in biotech and medical devices, while also diving into startups improving medical practitioner efficiency, evaluating the evolving regulatory environment and debating valuations and offering a ‘temp check’ on the market for digital health startups leveraging ML.

Annie Case, Kleiner Perkins

Although Kleiner Perkins has a long history of investing in iconic health companies, we believe it is still the early innings of digital health as a category today.

When I evaluate new opportunities in the space, I often start by thinking through how the company will move the needle on cost, quality, and access to care — the “iron triangle” of health care systems. Conventional wisdom has been that it’s impossible to improve all three dimensions simultaneously, but we are seeing companies leverage technology to shift this paradigm in meaningful ways.

It’s no longer just a promise. For example, Viz.ai is using artificial intelligence to detect and alert stroke teams to suspected large vessel occlusion strokes, enabling patients to get treatment faster. Their workflows improve access to life-saving care, deliver higher quality through reduced time to treatment (every minute counts as ‘time is brain’ in stroke care), and dramatically reduce the costs associated with long-term disability.

We are also seeing companies provide this type of tech-enabled care outside of the hospital setting. Modern Health is a mental health benefits platform that employers are making available to their employees. The platform triages individual employees to the right level of care, providing clinical care to those with diagnosable depression or anxiety, and making self-guided or preventative care available to everyone else. Their solution improves quality and access by offering mental health services to every employee and reduces the cost associated with untreated mental illness, lost productivity, or employee churn.

Heading into 2020, we’re eager to back digital health companies in new areas that leverage technology to impact cost, quality, and access. A few spaces that I’m excited about are behavioral health (mental health, substance abuse, addiction, etc), care navigation, digital therapeutics, and new models integrating telehealth, remote care and AI to better leverage medical professionals’ time.

Zavain Dar and Adam Goulburn, Lux Capital

Below are some thoughts and coming predictions on health tech broadly:

  1. Digital therapeutics continue to pick up steam — on the back of Pear and Akili, more companies push to FDA and enter the market. In addition, broader consumer platforms like Calm and Headspace look to broaden their offerings by investigating clinical approvals.
  2. At least one major pharma looks to expand its consumer surface area by acquiring one of the new digital, consumer-facing generics platform (ex Hims, Ro, NuRx).
  3. Venture funding for biotech continues to boom with at least three Series A’s of $ 100M or more in size.
  4. Drug discovery for neurodegeneration sees a renaissance. High-profile failings of Biogen and the beta-amyloid hypothesis sees a shift of innovation to early-stage biotech and venture creation.
  5. Big pharma has its DeepMind moment acquiring at least one machine-learning (AI) enabled drug discovery company.
  6. Clinical trial tech investments heat up; new companies and technologies emerge to make trials patients first and systems get smarter at finding the right patients at their point of care; large incumbents like IQVIA, LabCorp and PPD get acquisitive.
  7. At least three traditional Sand Hill Road tech venture firms open life science practices or raise dedicated funds.
  8. Machine learning targets chemistry driven by large advancements in transformer (NLP) models; has the time for computational chemistry finally come?
  9. HCIT sees a renaissance driven by increased CIO responsibility towards data interoperability. Companies either working on federated ML to allow systems to speak to each other or lightweight edge applications enabling rapid clinical deployment will see quick uptake and traction, until now impossible in HC.

Kristin Baker Spohn, Charles River Ventures (CRV)

In the last 10 years, digital health has exploded. Over $ 16B has been invested in the sector by VCs and we’ve seen IPOs from Livongo, Progyny and Health Catalyst, just in the last year alone. That said, there’s still a lot that mystifies people about the sector — there are spots that are overheated and models that will struggle to deliver venture scale outcomes. I’ve seen digital health evolve first hand as both an operator and investor, and I’m more excited than ever about the future of the space.

A few areas and trends that I’ve been following recently include:


TechCrunch

Private equity and venture capital investors are copying our counterparts in the hedge fund world: we’re trying to automate more of our job.

When I was single, I registered for (a lot of) dating websites. When I met my now-wife, I realized that any technology that can find me a spouse is a killer app. That’s why 40 million Americans use online dating sites. But, most of use raise capital and source deals the same way people looked for dates 20 years ago: networking at conferences (or bars).

Most of us want one spouse and we’re done, but in business, you want a lot of partners. I’d argue that the same type of technologies that have revolutionized dating can revolutionize our industry.

In liquid markets, most of the calories expended on technology and analytics are focused on trade selection, or “origination.” However, in private markets, there is more room to optimize across all 11 steps of the investing process. Below, I’ll walk through how progressive investors are using technology and analytics throughout all of their operations. To learn more about this space, I suggest joining an online community I co-founded, PEVCTech.

1) Managing the firm 

Before you can actually invest, you have to manage your fund. This is harder than it sounds. In the private equity universe, most partners have primary training as deal-makers, not as managers. When I talk with junior personnel at private equity firms, the quality of firm management is a frequent complaint.

I’ve used Asana extensively to manage activities firm-wide. I also use several living Google docs to maintain the minutes and the group agendas for my fixed weekly meetings. I use another live Google doc to maintain my database of companies I’m marketing to other VCs. That Google document provides cut and pasteable text I can share with other investors, based on their stage, focus and appetite.

Other investors use Trello, Basecamp, and Monday for making sure that everyone at the firm knows each others’ long-term OKRs and short-term projects. Point Nine Capital uses 15Five for continuous employee feedback.

One aspect of management which merits attention is your own cybersecurity, which should not be left until a crisis to address. Small investment firms often have interns and entrepreneurs in residence passing through, each of which is a security risk. (See A comprehensive guide to security for startups by Bessemer Ventures.)

2) Marketing

Kyle Dunn, CEO of Meyler Capital, says “investors should focus on building a large audience within a CRM system (having the ability to categorize your different constituents); communicate consistently to that audience; and implement an automation platform that can leverage lead score to profile interest. It sounds simple; however, very few asset managers actually do it.” I agree.

Many tools designed for B2B marketing in general are also relevant to investors. I know of funds using Constant Contact, Goodbits, Pardot and Publicate to create light newsletters for internal and external consumption. A major angel group uses Influitive, an advocate management tool, to track, activate and motivate their members. Other VCs use Contently* or Social Native* to create relevant content. Meyler Capital is taking the analytical rigor of modern internet marketing and applying it to fund marketing.

Point Nine Capital’s website is now powered by Contentful — it uses Unbounce for landing pages and Typeform for surveys and other data collection. “We’re using … TinyLetter for our “Content Newsletter” … and Buffer to schedule social media posts. Last but not least, we still use MailChimp to publish our (in)famous newsletter.”  I also use Mailchimp for the teten.com and pevctech.com mailing lists. Point Nine Capital uses Mention for media monitoring. Teten.com is built on WordPress as my content management system.

I use Hootsuite to coordinate my social media activity, which consists of Teten.com, PEVCTech.com, Linkedin, AngelList, and (passively) Twitter and Facebook. I use Google Drive to host my conference presentations, which are all embedded at teten.com. I use Diigo, a social bookmarking tool, to keep a record of useful websites.  I have also configured IFTTT to share on Twitter anything new I post on Diigo.

Qnary is one of numerous tools which can help build out your team members’ virtual presence. A tool like Quuu identifies relevant, shareable content to keep your social media channels active.

“There are two crucial aspects of marketing that investors often overlook: automation and analytics,” wrote Sabena Quan-Hin, Marketing Manager at Flow Capital. “Automation allows you to spend less time on tedious tasks and will help boost productivity, especially within a small marketing team. At Flow Capital, we use HubSpot’s sequences and workflows functions to automate a bulk of our emails and internal tasks. This provides us more time to develop meaningful relationships with prospects and customers. We use Google Analytics, HubSpot, and LinkedIn Campaign Manager for the majority of our analytics. For our content creation, we use tools such as Canva (graphic design) and GoToStage (webinars platform) to create and share content for prospects to find.”

3) Raising capital

Tim Friedman, Founder, PE Stack, said, “If I could offer one piece of advice to today’s managers, it would be to take the time to understand the demands of the modern institutional LP. Today’s investors are allocating more to alternatives in an environment where there are record numbers of new funds; and seeking deeper relationships with managers via direct and coinvestments. The past few years have therefore seen a huge rise in the proportion of LPs using specialized tools to manage and understand their portfolios, including platforms such as Chronograph, Solovis, Allocator, Cobalt LP, eFront Insights, iLevel, Burgiss.

The proportion of LPs using technology to manage their portfolios will continue to increase, and GPs unable to provide quality data to LPs will find it increasingly hard to retain and attract LPs. We are also seeing technology evaluation as an increasingly important part of LP operational due diligence. Excel and Google simply aren’t going to cut it if you expect to build a high quality institutional investor base.”

A more efficient approach to fundraising than haphazard networking is to mine the data exhaust from the limited partner universe to identify those LPs most likely to find your fund attractive and focus all your energy on them. I previously posted a detailed presentation with sales technology tools useful for B2B sales.

I always make a point of keeping firm records updated in the major data-trackers tracking the VC industry: AngelList, CB Insights, Crunchbase, Dow Jones VentureSource, Pitchbook, Preqin, and Refinitiv Eikon. LPs, coinvestors, and press use these tools, so I work for free for these data vendors to make sure that their data about our activities is correct. This is a great example of why data businesses have substantial moats.

Boardex and Relationship Science make it easier to understand and map social networks into potential limited partners. Cobalt for General Partners helps GPs to optimize their fundraising strategy. MandateWire and FinSearches provide leads on limited partners with new mandates which might fit your fund. Evestment is a platform for capital-raisers; Evestment TopQ automates private markets performance calculation.

I am a heavy user of DocSend, a secure content sharing and tracking platform that can be used to seamlessly share recurring materials with potential LPs. It provides analytics to track shared materials across target senders and improve the content for future leads. Point Nine Capital uses Qwilr to create modern, mobile-native collateral.

Most funds open data rooms to share previous reports, performance data, pitch decks, legal docs and other fundraising material with LPs. I’ve seen funds using Ansarada, Allvue, Box, CapLinked, dfsco, Dropbox, Digify, Drooms, Google Drive, iDeals, Intralinks, Ipreo, Merrill Corporation, and SecureDocs for their Virtual Data Rooms. These same tools are used by companies raising capital.

I’ve also experimented with using services which are marketplaces between LPs and GPs: CEPRES, DiligenceVault, FundVeil, Harvest Exchange, and Palico. Some funds are using technology-enabled intermediaries to help them sell to retail LPs, e.g., Artivest and iCapital Network.

Deer Isle Group has built the D.I.G. Beacon technology system, which automatically outbound-solicits a universe of over 10,000 institutional investors, without requiring LPs to register for an online network of funds.

Crystal guides you in how to influence a particular person, based on their online presence.  X.ai is a virtual assistant which can coordinate your fundraising and other meetings.


TechCrunch

Welcome back to the transcribed edition of the popular podcast Equity. Kate Clark had the hosting reins this week and welcomed Revolution’s Clara Sieg to the studio.

They discussed the trend of investors backing companies from “second-tier” markets like Austin, Atlanta, Denver, Philadelphia, Seattle, etc. Just how do cities become tech hubs? It’s a special kind of recipe, Sieg says. A city must have a great university, or a few, nearby to provide a constant flow of talent. They need some big corporations around for the same reason. They need a healthy community of angel investors ready and willing to get things going.

Sieg: Fundamentally in these second and third tier markets, an idea on the back of a napkin doesn’t get funded, so you really have to bootstrap to a certain degree and prove out really economics before you can unlock capital. Typically the companies that we’re investing in at the Series A, Series B level are a little bit farther along than their brethren would be in the Bay Area or New York.

Valuation expectations are just lower so you own more of a company for a smaller check-in. Inherently, if it’s an exit, that is a better outcome for you and it’s just cheaper to scale companies in those markets. Employee retention is better, cost of living is lower, so the capital required to scale these companies and that’s coming in after you and diluting you is less.

Clark: So when Steve Case founded Revolution, was he coming at it from the perspective of like, “This is obviously good business?” Which it is, to invest in these companies, or was it coming from a perspective of like, “It’s not fair that companies in these areas just don’t have access to capital like we do here in the Bay Area?”

Sieg: Neither, really. I think our investing approach in the early days, and what we still focus on today is what is now commonly referred to as disruption, right? Historically, Zipcar was basically disrupting the rental car market, and it was not really thought of as a great venture-backable opportunity in the early days. That’s obviously changed now, transportation is a huge piece of what venture capitalists focus on, but from day one, we focused on sleepy, incumbent markets where technology can be an enabler of a new business model that makes it better, faster, cheaper for the consumer, or the business that it’s serving, and where you can change the margins in the business to create a market leader that incumbents then either have to own or that can be a large standalone company.

Want more Extra Crunch? Need to read this entire transcript? Then become a member. You can learn more and try it for free. 


TechCrunch

Created by R the Company. Powered by SiteMuze.