Meet the VCs who are dominating health tech

Health tech has also weathered the market storm far better than other sectors this year. “We haven’t seen things tail off too much due to volatility and public markets. Obviously, some valuations are coming down. But the space still is pretty robust,” says PitchBook senior health care analyst Rebecca Springer. 

We made a list of the biggest dealmakers in health tech—some pioneers of the industry, some rising stars. These investors were active in PitchBook’s largest health tech deals of the past five years. They’re thinking big—and investing even bigger. Hemant Taneja and Beth Seidenberg were both early investors in Livongo, which was sold to Teladoc Health for $18.5 billion in the biggest health tech acquisition ever. Vijay Pande, head of life sciences at Andreessen Horowitz, led the $300 million series B funding round for Devoted Health, a digital health startup focused on Medicare beneficiaries. OAK HC/FT’s Annie Lamont was the biggest investor in cloud health startup Athenahealth at the time of its IPO; it was sold last year for $17 billion. 

The increasing role of tech companies in an area as sensitive and vital as health care obviously raises many questions. A16z’s Pande compared health care over the next twenty years to finance over the past twenty years. “If we go back in time to the 2000s, and we’re on Wall Street talking about computers doing what a human being does, people would say that’s ridiculous,” he says. “It’s not that there won’t be doctors in twenty years, just like there are people on Wall Street, it’s just now they’ll be supercharged with tools that will be transformational.”

While health care is a specialized sector, I was struck by the range of backgrounds among the successful investors on the list. Some have been formally trained as doctors or researchers, but others have learned the ins and outs of the health care landscape through years on the business side. When it comes to advising health care startups, a variety of perspectives is essential: “I’ve talked with founders who are physicians who are trying to solve a clinical problem that they recognized in their training or in their own practice, but they don’t really understand the business side of things,” explains Springer. “It’s not just that you need to have a familiarity with medicine, there’s a whole additional level of skills that you have to add on top of that.”

Beth Seidenberg of Westlake BioPartners was a physician and completed her training at the National Institute of Health with none other than Anthony Fauci (a “terrific guy” in person) and then went on to be a pharmaceutical executive for twenty years before trying her hand at investing. Annie Lamont came at it from the opposite end of the spectrum. Lamont fell in love with venture capital investing in the 1980s and then narrowed in on health care. “There was no one else that was focusing on it,” she says. “So I made that sort of my expertise and practice.” 

Peter Singlehurst of Baillie Gifford is the only true generalist investor on the list, but he argues that’s a strength, not a hindrance when his private investment team spots a health tech company. “There seems to be a general consensus that specialist investors do health care, and non-specialist investors can’t do everything else. We don’t believe that’s true,” he explains. 

All the investors on the list have specific and lofty goals for transforming the health care industry. Many were also transparent about the lengths we still have to go to, however, and they didn’t pretend technology alone could address our current system’s failings. 

“We are just in inning three of health tech, so there is so much that we need to do to truly reverse the trends in rising health care costs and poor outcomes,” says Sofia Guerra, an investor with Bessemer Ventures. 

Read the full list here. 

Lucy Brewster
Twitter: @lucyrbrewster
Email: [email protected]
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Deep Instinct, a New York-based deep learning cybersecurity company, raised $62.5 million in funding. BlackRock led the round and was joined by investors including Chrysalis Investments, Millennium, and Unbound.

- DataGuard, a Munich-based data privacy, information security, and compliance platform for small and mid-sized businesses and corporates, raised €61 million ($59.98 million) in Series B funding. Morgan Stanley Expansion Capital led the round and was joined by One Peak. 

- Theorycraft, a remote-based gaming studio, raised $50 million in Series B funding. Makers Fund led the round and was joined by investors including NEA and a16z.

- Brightflow AI, a Walnut, Calif.-based financial intelligence platform for small businesses to manage cash flow, raised $15 million in Series A funding led by Haymaker Ventures.

- Respond.io, a Kuala Lumpur-based conversational commerce platform, raised $7 million in funding. Headline led the round and was joined by investors including AltaIR Capital, Smart Partnership Capital, Sterling Oak Group, and Calendula Ventures.

- Bitgreen, a New York-based climate-investment blockchain platform, raised $5 million in funding through the crowdfunding platform Republic. 

- Headquarters, a Singapore-based financial management platform for Web3 teams, raised $5 million in pre-seed funding co-led by Crypto.com Capital, Forge Ventures, and MassMutual Ventures.

- [untitled], a New York-based music creation and collaboration platform, raised $4.6 million in seed funding. General Catalyst, Looking Glass Capital, Shine Capital, Not Boring Capital, and other angels. 

- Boddle Learning, a Tulsa, Okla.-based gaming educational company, raised $3 million in seed funding. Alpine Ventures led the round and was joined by investors including KCRiseFund, Atento Capital, Lightship Capital, Cortado Ventures, Rise of the Rest, and others.

- Surge, a San Francisco-based treatment company for patients undergoing surgery, raised $2.6 million million in pre-seed funding co-led by HCVC and Boutique Venture Partners. 

- Metre, an Oakland-based metabolic health platform, raised $1 million in pre-seed funding led by Michael Adams, John Broderick, and other angels.

PRIVATE EQUITY

- Shamrock Capital acquired a majority stake in AnswerLab, a New York-based independent UX research firm. Financial terms were not disclosed.

EXITS

- BlackRock Long Term Private Capital agreed to acquire a majority stake in Paradigm Oral Health, a Lincoln, Neb.-based oral surgery and digital dentistry platform, from InTandem Capital Partners. Financial terms were not disclosed.

- Zelis acquired Payer Compass, a Plano, Texas-based medical billing firm, from Spectrum Equity and Health Enterprise Partners. Financial terms were not disclosed.

IPOS 

- CALB, a Jiangsu, China-based battery supplier for electric vehicle makers, plans to raise as much as HK$13.6 billion ($1.7 billion) in a Hong Kong initial public offering. 

SPAC

- PlayUp Limited, a Sydney-based online betting operator, agreed to go public via a merger with IG Acquisition Corp., a SPAC. A deal values the company at $350 million. 

FUNDS + FUNDS OF FUNDS

- HarbourVest Partners, a Boston-based investment firm, raised over $3 billion for their twelfth fund focused on buyout, micro buyout, venture capital, and growth equity investments through partnership investments. 

PEOPLE

- Edison Partners, a Princeton, N.J.-based growth equity firm, promoted Kelly Ford to COO.