Extent of Corporate Venture Funds in Health Care
According to Accenture, 60 hospital-sponsored or corporate venture capital funds are now actively investing in healthcare startups, and investment is expected to reach $7.5 billion annually by 2020. In April 2017, the firm anticipated investment in digital health companies alone by all venture capital and private-equity entities would reach $7 billion by the year’s end. Six areas where digital transformation is key to higher quality, better access, and affordability received 73 percent of investor funding: provider efficiency, virtual care/coordination, wearable devices, personalized medicine, enhanced diagnosis, and big data and analytics.
Early health system leaders in innovative funding for new products, services, and technology include Ascension Health, Dignity Health, Intermountain Healthcare, Kaiser Permanente, Mayo Clinic, Partners HealthCare, and Providence St. Joseph Health. Capital commitment has been considerable, whether the systems invested on their own or partnered through venture capital funds. Since founding its venture capital division in 2001, Ascension Health has raised $800 million, working with capital contributed by other not-for-profit systems, and has invested in more than 50 companies.
See related article: Financing a Digital Transformation
Sources: Accenture Consulting, Digital Health Comes of Age: Self Disrupt or Self Destruct , 2017; and Barkholz, D., “Hospital-Based Venture Funds Bet Big on Health Startups,” Modern Healthcare, April 8, 2017.