Digitalis Ventures launches $100M healthcare innovation fund

By Heather Mack
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Venture capital firm Digitalis, which was founded last year and has offices in New York and California, has launched a $100 million fund to spur innovation in healthcare by investing in early and seed stage companies that leverage math, science and technology to address human health problems.

“As we rethink the value system of how we finance healthcare, we have to look at where the risk is going to sit. How does that drive innovation in the venture world?” Digitalis Founder and Managing Partner Geoffrey W. Smith told MobiHealthNews in an interview. “We want to bring together different fields to find methods to forward-engineer solutions in healthcare.”

The aim is is to address complex healthcare problems by looking at solutions at the intersection of math, physics, computing, chemistry and biology, and Digitalis is looking at both individual and population health. A big focus of Digitalis is machine learning, Smith said, although just how it is integrated into a company they potentially fund is not necessarily the most important part.

“We’re less interested in the tool per se, but more about how you think about the cycle of how knowledge is generated,” Smith said. “We’re really interested in people who can use the commodity part of the machine learning stack.”

In that way, Smith said, Digitalis is looking for companies that address how “health space” is mapped.

“Rather than go out and span the biotech space for a new drug, how do you forward engineer how you are going to solve problems in health? It could be biological, it could be technological. We are tool agnostic,” he said.  “You look at the changes in technology, with web services, cloud computing and sequencing, put together with the incredible bloom in biologic understanding, and what is interesting is at the edge of all these trends.”

So far, the company has invested in three companies: CareDox, which offers a digital health document platform in public schools; Girihlet, a Berkeley-based biotech company that uses T-cell sequencing for immune system monitoring; and Second Genome, a clinical stage biotech company focused on the microbiome.

Smith, who was the founding director of the Mount Sinai Institute of Technology as well as a professor at Mount Sinai’s medical school, started working in healthcare in the 1990s as an entrepreneur, and said he actually sees parallels in the current climate of digital health innovation. Back then, he said, his company Advanced Health commissioned Motorola to purpose-build a tablet as a bedside tool for doctors to use at point of care.

“It was slower, it was much more difficult to get implemented, but back then there were periodic points in time about how to think about healthcare and risk assessment, and I think we are sort of reliving it, but in a much more sophisticated stack,” Smith said.

Digitalis will focus on companies seeking to achieve proof of concept, complete product development or demonstrate product market fit, and the firm is also looking to co-found new companies.