StartUp Health, GE Ventures seeking second class of startups

By Jonah Comstock
02:00 am
Caremerge Caremerge, a member of StartUp and GE Ventures' first class.

GE Ventures and StartUp Health announced that they would invest in and mentor a second three-year class of health startups, following up on the pair's 2013 collaboration. Unlike the previous iteration, this time they will make an investment of $50,000 in each startup, and will be looking for companies that address two specific areas of digital health: payment solutions and "virtual health networks", a category which includes telemedicine.

"The portfolio [from 2013] has grown tremendously," Ruchita Sinha, director of healthcare at GE Ventures, told MobiHealthNews in an interview. "One company has already been acquired, Arpeggi. Two of the companies, Aver and Caremerge, we’ve participated in their follow-on rounds. We count that as a pretty big success for us. ... We wanted to continue that partnership with another class."

Arpeggi was acquired by Gene by Gene in 2013. Aver Informatics raised $8.5 million in May 2014 and Caremerge picked up $4 million at the beginning of this year.

Learn on-demand, earn credit, find products and solutions. Get Started >>

When GE Ventures and StartUp Health first collaborated, StartUp Health CEO Unity Stoakes told MobiHealthNews that the decision not to make guaranteed investments in the companies was a way to emphasize what was really important about the collaboration.

"What we’ve found is that a small amount of capital isn’t what changes the game for an early stage startup," he said at the time. "What really matters is a great pilot program or a technology expert who can propel your business forward at a key time.”

Though the new class will still focus on pilots and mentorship, the companies appear to have reconsidered the importance of that initial investment. This time around, each company will receive $25,000 from StartUp Health and $25,000 from GE Ventures. GE Ventures and StartUp Health will take an equity stake between 2 and 10 percent, depending on the stage of the company.

"We are offering $50,000 to every startup that is accepted into the program," Sinha told MobiHealthNews. "And one of the big reasons we’re doing that is we think that’s a key aspect. It gives the companies some firepower in the early stages."

The companies are looking for a minimum of 10 startups for the new program (the first class ended up with 15), and will open up multiple rounds of applications to select them. They're specifically looking out for companies focusing on payment solutions, which GE Ventures sees as an important area in light of all the changes to healthcare payment models.

"We want to invest in areas that enable this transition from fee for service to value based care," Sinha said. "...The way medical claims are being processed, it’s largely paper based and it’s very inefficient."

The other focus area, virtual health networks, includes virtual visits, store and forward technology, communication between physicians, communication between patients and doctors, second opinion services, specialist referral services, and remote monitoring. The class will likely be announced in early 2016.


The latest news in digital health delivered daily to your inbox.

Thank you for subscribing!
Error! Something went wrong!