AV’s Healthtech Fund Explained
Our Healthtech Fund offers investors a portfolio of companies aiming to transform medicine and healthcare
Healthtech represents one of the fastest-growing segments in healthcare. Emerging technologies such as bioprinting, genomics, and smart devices are driving revolutionary advances in healthcare while presenting valuable investment opportunities. Some sources gauge the global market size at ~$350 billion in 2019 and project growth to reach $950 billion by 2027. The venture story is, not surprisingly, equally robust. There are ~20,000 healthtech startups in the U.S., and VCs invested about $14 billion into the sector in 2020 — double 2019’s total.
Some of this growth is due to the fact that consumers are increasingly embracing proactive, preventative, and personalized care, as well as self-monitoring products. Additionally, high healthcare costs are also increasing the demand for disruptive solutions. The global pandemic and the emergence of chronic diseases are also spurring innovation in telehealth and biotech.
Alumni Ventures’ Healthtech Fund will target this intersection of entrepreneurship, growing trends, and transformative medical advances to source high-potential opportunities for investors. We spoke with Alumni Ventures’ Chief Investment Officer Anton Simunovic about what investors can expect from AV’s Healthtech Fund.
Our Healthtech Fund will invest in a diversified portfolio of ~20-30 companies applying secure record digitization, telemedicine, big data, genomics, and real-time monitoring via wearable devices. The fund will be invested over ~12-18 months with a large reserve (~20-25%) for follow-ons. Every investor becomes a member of the Healthtech Venture Club, with opportunities to invest in Syndications, learn, and network.
To learn more, click below to review fund materials or connect with a Senior Partner.
Anton Simunovic
Chief Investment Officer, Alumni Ventures.Anton is the Chief Investment Officer at Alumni Ventures. Anton has over two decades of technology experience as a proven venture capital investor, entrepreneur, and operating executive in companies ranging from startups to Fortune 10 organizations. Anton possesses substantial international experience in Canada, China, Europe, and Israel and has served on the board of directors of more than 20 private and public companies.
Could you summarize the thesis of Alumni Ventures’ Healthtech Fund?
Our Healthtech Fund offers accredited investors the chance to own a portfolio of innovative companies pursuing medical advances that can redefine patient care, longevity, and prevention against deadly diseases. Advances in big data, artificial intelligence, telemedicine, genomics, secure record digitization, and real-time monitoring through wearable devices are redefining modern medicine. It’s these innovative technologies and disruptive business models that are presenting Alumni Ventures and other established VCs with a wealth of high-potential opportunities.
The Healthtech Fund’s portfolio will consist of approximately 20-30 deals diversified by stage, industry sector, geography, and investor syndicates. The fund will maintain ~20-25% reserves for follow-on investments in companies that differentiate themselves from the pack through their operational traction, scale of opportunity, and capital momentum to raise downstream rounds. This strategy ensures we re-up in our best-performing portfolio companies.
What are some of the factors that indicate whether or not a healthtech company has potential as an investment?
When it comes to healthtech, we place particular emphasis on companies with a strong portfolio of intellectual property — such as patents, know-how, proprietary treatments, device designs, and other indications of robust R&D. Beyond IP, it’s also crucial that a potential portfolio company is run by a team with both strong technical capability and an ability to navigate the complex medical regulatory environment. For example, if a product or service stores sensitive patient data, regulators will closely scrutinize the company to ensure it’s compliant with HIPAA legislation.
Beyond these factors, we also like to see a leadership team that isn’t only knowledgeable about their product, but passionate about its role in bettering the lives of others and creating meaningful advances in healthcare and medicine in general. Company building is hard, and there are no substitutes for intrinsic passion and drive.
Other key criteria that are a standard part of our process for analyzing potential investments:
- Market opportunity. Is there a market that is in need of a defined solution, and can the market’s size support one or more large and profitable businesses.
- Strong founders/teams. Founder/market fit is critical, and ideally, we like to see previous startup experience/success on management’s resumes.
- Solving difficult problems. This generally means there is a technical complexity/IP and the potential to build strong competitive moats.
- Attractive valuation and terms. We look for prices and terms that will not inhibit the ability of management to raise downstream rounds, and we always aim for pro-rata rights.
Who oversees the Healthtech Fund for AV?
The Healthtech Fund’s vetting and investment efforts are overseen by Managing Partner Lacey Farrell Johnson (Boston) and Principal Jonathan Mo (New York). Lacey has held several key investing roles during her time at Alumni Ventures, as well as previously working at J.P. Morgan, Goldman Sachs, and CareGroup Investment Office. Jonathan performed diligence in many verticals during his time at 11.2 Capital, Avery Dennison Ventures, and Silicon Valley Bank before joining Alumni Ventures.
Lacey Farrell Johnson
Managing Partner, Focused FundsLacey joined Green D Ventures from CareGroup Investment Office, a $3 billion manager of combined endowment and pension assets. As a member of the investment team, Lacey was responsible for investment sourcing and due diligence. Lacey managed investment opportunities across asset classes and strategies, including venture capital, growth equity, buyout, private credit, and hedge fund vehicles. Previously, she was an Associate at J.P. Morgan Asset Management and an Analyst in the Securities Division of Goldman Sachs. Lacey has a BA in History from Middlebury College and an MBA from Tuck.
Jonathan Mo
Principal, Focused FundsJonathan previously invested in frontier tech startups across prior VC roles at 11.2 Capital, Avery Dennison Ventures, and Silicon Valley Bank. He also supported the startup operations and product team at TandemLaunch, a deep tech startup foundry, and has helped build data-centric and automation tools at many of his roles. He studied astrophysics, biology, and political theory at Columbia, biochemistry at NYU, and has conducted research in both the physical and life sciences. He later studied medicine at the National University of Ireland, and game theory and strategy at The London School of Economics.
How does the team identify investments for the fund?
Deals added to our Healthtech Fund undergo a thorough and rigorous due diligence process. Companies are graded against our proprietary scorecards and undergo three rounds of scrutiny from our seasoned investment professionals. This process enables the fund to assemble a portfolio of high-potential deals while abiding by the core investment thesis of the fund.
Beyond our investment approval process, we leverage the deal flow of our more than 60 in-house investing professionals, geographically dispersed across six U.S. offices in key venture hubs. Every member of our team brings unique experience and a broad network of entrepreneurs, industry experts, and fellow VCs to our deal sourcing pipeline.
Will you share some notable healthtech investments from AV’s portfolio?
One that comes to mind is SonderMind, a behavioral health network addressing the three-sided marketplace between consumers, therapists, and enterprise partners. Powered by an expert team and data-driven insights, the company has created a robust software platform that provides users with reliable access to a variety of mental health services.
Another example is American Gene Technologies (AGT). This company is developing and commercializing genetic medicines targeting major diseases, including HIV/AIDS, Phenylketonuria, and Hepatocellular carcinoma (liver cancer, or HCC). AGT’s drugs will treat symptomatic disease with the intent to provide durable cures that extend the length and improve the quality of patients’ lives.
Why might an investor find this an attractive area to invest in?
Healthtech represents one of the highest growth sectors for venture at the moment. The field has exploded under the convergence of big data, bioinformatics, and computing power. Many innovative startups are now aiming to bring transformative products and services to the market. The opportunity to build and back disruptive healthtech companies has never been greater. AV’s Healthtech Fund offers the individual a unique chance to materially profit through revolutionary medical technology and treatments, and at the same time change people’s lives for the better.
To learn more about adding healthtech investments to your portfolio, we invite you to check out our fund materials or reach out to our team.
Our Healthtech Fund will invest in a diversified portfolio of ~20-30 companies applying secure record digitization, telemedicine, big data, genomics, and real-time monitoring via wearable devices. The fund will be invested over ~12-18 months with a large reserve (~20-25%) for follow-ons. Every investor becomes a member of the Healthtech Venture Club, with opportunities to invest in Syndications, learn, and network.
To learn more, click below to review fund materials or connect with a Senior Partner.
Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.