Key Healthtech Trends and Venture Opportunities
We highlight healthtech investments from AV’s existing portfolio as examples of high-potential opportunities in the space
The past few years have fundamentally reshaped the healthtech space. Increasing healthcare costs have spurred demand for new approaches to healthcare. The vertical encompasses products and services utilized outside of conventional treatment centers like hospitals and doctors’ offices. Consumers and patients are increasingly embracing preventative and personalized care through new self-monitoring products and innovative services. Spurred on by the global pandemic and an array of new, transformative technologies, entrepreneurs and investors are surging into the healthtech space.
In fact, healthtech is one of the fastest-growing segments within the healthcare sector. Emerging technologies such as bioprinting, genomics, and smart devices are driving revolutionary advances in healthtech, while presenting promising investment opportunities. Some sources value the global market size at ~$350 billion in 2019 and project growth to reach $950 billion by 2027.
Venture capitalists in particular have seized on the momentum of the market. There are ~20,000 healthtech startups in the U.S., with VCs investing about $14 billion into the sector in 2020 — doubling 2019’s total.
Alumni Ventures’ new Healthtech Fund was created to invest in a diverse portfolio of promising startups in the healthtech and life science spaces. Below you’ll find some investments in rapidly trending subsectors of healthtech from AV’s existing portfolio that illustrate the types of high-potential companies we will seek for our Healthtech Fund.
Healthtech Fund Open Through Q2 2023
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.
Click below to review fund materials or connect with a Senior Partner.
Addiction and Mental Health
Two healthcare areas in critical need of technical innovation and increased patient access are substance addiction and mental health treatment. Beyond the emotional and physical tolls on communities, a 2021 CDC estimate put the monetary cost of the American opioid epidemic at over $1 trillion in 2017 alone. Similarly, the American Psychiatric Association data estimates the American economy loses ~$210 billion annually in reduced productivity related to mental health issues.
Entrepreneurs and startups are helping to address these pain points, and the market values reflect this. Allied Market Research valued the global mental health market at $383 billion in 2020, forecasted to reach ~$538 billion by 2030. A report from MarketResearch.com valued the addiction rehab industry at $42 billion in 2020 — projected to reach $53 billion in 2025.
Sample Mental Health Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s Healthtech Fund.1
SonderMind is an online marketplace connecting therapists with consumers. The Denver-based behavioral health network aims to address a three-sided marketplace between consumers, private practitioners, and enterprises using software that ties customer support to medical billing systems. AV first invested in SonderMind’s $2.5 million seed round at a $5.5 million pre-money valuation and recently participated in the company’s $150 million Series C at a more than $111 billion valuation.2
Tempest develops virtual services to address alcohol use, misuse, and addiction. They offer an online sobriety school and aftercare program that enable users to receive the education, tools, and community they need to build a life free from alcohol.
Blue Note Therapeutics is a prescription digital therapeutics company providing mental health care for cancer patients. The company combines clinical expertise, neuroscience, and digital innovation to offer users mental healthcare anywhere at any time
Cancer Research and Treatment
Despite centuries of research, cancer still claims hundreds of thousands of lives every year. Scientists and entrepreneurs alike continue to conduct and fund life- saving research in order to cure and treat the disease. The success of mRNA- developed vaccines to combat the global pandemic has provided entirely new methods of oncological treatment. According to Mordor Intelligence, the global cancer therapy market was valued at approximately $158 billion in 2020 and is expected to produce $268 billion in revenue by 2026, with a CAGR of 9.15% over that period.
Sample Cancer Treatment Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s Healthtech Fund.1
SQZ Biotechnologies has created a cellular delivery system for oncology and therapeutics development. AV participated in SQZ’s $72 million Series C and $65 million Series D. In 2020, the company went public with a $71 million IPO.2
miRecule is a preclinical biotechnology company focused on the development of microRNA (mRNA) therapeutics to treat cancer and other diseases. mRNA technology has notably been used to develop COVID-19 vaccines.
AIQ Solutions has developed a medical software platform that provides early predictions about cancer treatment effectiveness and toxicity risk. Their platform characterizes treatment response for each individual lesion and organ system with the goal of improving cancer patient outcomes.
Genomics-Derived Testing and Therapies
Genomics is the research field encompassing human genetics — specifically, the instructions for cell reproduction and development encoded in genes. Many illnesses and diseases are directly related to an individuals genetic makeup. Because of this fact, many diseases can be screened for, identified, and treated using genomics, resulting in a fast-evolving and growing market for these types of therapies. According to Fortune Business Insights, the global genomics market size was $23.1 billion in 2020 and is projected to grow from $278 billion in 2021 to $94.7 billion in 2028.
Sample Genomics Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s Healthtech Fund.1
American Gene Technologies is a gene and cell therapy company whose drugs aim to treat symptomatic diseases with the goal of providing durable cures that improve the length and quality of patients’ lives. They possess an extensive library of intellectual property, including research and gene therapies.
Excision Bio is a creator of advanced gene-editing therapeutics created to offer safe and efficacious medicines attempting to eradicate or disrupt viral infections. The company is developing CRISPR-based therapies with the goal of improving the lives of chronically ill patients.
Genome Medical is a genomic services network and technology platform that integrates genomic medicine into everyday health care. The company provides clinical assessments and tools, test recommendations, and ordering, along with personalized care plans to deliver optimal patient care and improve health outcomes.
Healthtech Fund Open Through Q2 2023
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.
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.
1For illustration purposes only. These investments are not intended to suggest any level of investment returns; not necessarily indicative of investments invested by any one fund or investor. Many returns in investments result in the loss of capital invested. These investments are not available to future fund investors except potentially in certain follow-on investment options.
2Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and this fund involves substantial risk of loss, including loss of all capital invested. To see the performance of each exited investment for all Alumni Ventures funds over the last twelve months and our historical performance since 2014, click here.