Moving from a background in AI and Developer Tools to Healthcare has required a crash course in healthcare policy, finance, technology and regulations. I’ve always looked to investing trends and analysis to help me better understand a market. Looking at Corporate Venture Capital (CVC) in healthcare and life sciences is a fun exercise.
“over 48% of the top Fortune 100 companies have a corporate VC arm and these corporate VCs have participated in 24% of total deals globally for the past 4 years.” [source]
First, a few basics on Corporate Venture Capital…
Why does the Corporate Venture Group exist?
- Generate financial returns for Limited Partners (LPs) including parent Corporation
- Generate revenue for the Corporation
- M&A channel
- Licensing, Divestiture, Partnerships
- Foster Innovation, Identify Global Market Opportunities, funding initiatives that need to exist outside parent Corporation structure
What do Corporate Venture Groups do?
- Build a Portfolio of Investments that could range from Series A to “evergreen”
- Build an Ecosystem of Strategic Partners
- Generate revenue from revenue share deals and equity positions
- Invest as a Limited Partner (LP) in other Venture firms
So, what’s going on in Healthcare and Life Sciences Corporate Venture funds?
From this CB Insights report, you can see the most active funds include Merck Global Health Innovation Fund, Kaiser Permanente Ventures, Lilly Ventures, Siemens Venture Capital, Pfizer Venture Investments, Novartis Venture Funds, GE Ventures and of course Google Ventures.
Corporate Venture Capital (CVC) in Healthcare
Includes Information Technology, Therapeutics, Diagnostics and Drug Delivery, Diagnostics, Behavioral Health, retail healthcare and rise of consumerism, new provider payment models, delivery of care, implementation of the Affordable Care Act, Data and Analytics.
Vesalius Ventures (Vanguard Ventures, Fremont Ventures and Guidant Corporation)
Merck Global Health Innovation Fund
Zaffre Investments (BCBS of Massachusetts)
BlueCross BlueShield Venture Partners
Corporate Venture Capital (CVC) in Life Sciences
Includes Biotechnology, Biopharma, Medical Devices and Diagnostics, Drug Discovery, Pharmaceutical services, Pharma value chain.
Nova Novartis Venture Fund and Novo Ventures
MedImmune Ventures (AstraZeneca)
Lilly Ventures (Eli Lilly and Company)
F-Prime Capital Partners (Fidelity Biosciences)
Some additional reading:
Making Sense of Corporate Venture Capital
The 117 Most Active Corporate VC Firms Of The Last Year
Digital Health Funding: 2015 Year in Review (Rock Health)
Tencent, Google Capital Invest In Indian Healthcare Startup Practo
Medtronic, Sequoia launch $60M VC fund for Chinese med tech startups
Understanding the portfolios of these Healthcare and Life Sciences Corporate Venture Capital funds, the backgrounds of the Partners, where they are based and what companies they invest in help paint a picture for where things are going.
To learn a bit more about Healthcare technology read There’s a lot going on in Healthcare tech right now.
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