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New Funds to Invest in Digital Health Start-Ups

Digital heart health graphic

(Gerd Altmann, Pixabay.

18 Apr. 2023. A venture capital company supporting developers of digital technologies in health care says it raised $460 million to invest in early-stage digital health businesses. Define Ventures in San Francisco announced today its third venture fund for new start-ups and a separate fund for continuing investments in current portfolio companies.

Define Ventures says it invests in start-up companies applying digital platforms to improve health care practice, delivery, and management, as well as to advance new models of care to benefit both patients and practitioners. The company supports new enterprises with technologies working inside the health care system, as well as businesses delivering products or services directly to consumers. Define Ventures says it concentrates on start-ups in their earliest stages, providing funding with business development expertise from throughout the health care and life science ecosystems, including providers, payers, employers, and retailers.

The company says it raised $460 million for Fund III that will continue to support start-ups in their earliest stages, starting with companies still incubating, as well as seed and first- and second-round venture rounds, known as series A and B. Define Ventures is also establishing its Opportunities Fund to continue support for the 21 companies it previously financed.

New models of health care practice and delivery

Among Define Ventures’ portfolio companies is Verana Health in San Francisco. In Jan. 2023, Science & Enterprise reported on Verana Health’s partnership with researchers at Stanford University where they demonstrated how data in patients’ electronic health records can be collected and analyzed to replicate results from late-stage clinical trials of an eye disease biologic drug, with results reported in a scientific journal.

Another focus for Define Ventures is support for start-ups seeking new models of health care practice and delivery. Among its portfolio companies is Lightship, a five year-old enterprise in El Segundo, California creating systems it says make it easier for patients to participate in clinical trials, increasing access to clinical studies and enlarging the pool of candidates for studies to boost their representation of target populations. Another portfolio company is UpStream in Greensboro, North Carolina that seeks to deliver value-based care to older patients with a platform it says manages payments to physicians with quality-based criteria, which also benefit patients with fewer hospital visits and reduced co-payments.

“The health care system is evolving rapidly,” says founder and managing partner Lynne Chou O’Keefe in a Define Ventures statement released through Cision, “as multiple health care, technology and consumer trends converge, and even with the progress over the last few years, it remains a $4 trillion market opportunity that desperately needs greater digital transformation.”

In a blog post, O’Keefe touts Define Ventures’ Silicon Valley roots as an advantage for its investors and portfolio companies. “With deep health care operating experience and Silicon Valley influences,” says O’Keefe, “we uniquely see the convergence of enterprise and consumer models driving innovation in health care for the next decade.”

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