Could it be true? Is venture funding on the mend after it’s collapse in 2008? Some would say that the amount of capital invested is on the rise, and new funding streams are providing an excellent opportunity for startups to start getting funded again. But is this also true for health or healthcare startups? After leaving Google recently, I have been spending time talking to various startups and VC firms that are interested in health and healthcare apps. I am encouraged by what I see.
There seems to be a handful of seed accelerators and government initiatives focused on stimulating innovation in the consumer and provider health tech space. New incubators like Rock Health and Startup Health, an arm of the Startup America Partnership are trying to encourage attention to this vertical. Other cool platforms such as the Quantified Self movement, ONC’s Investing in Innovations (i2) Initiative, and this week’s impending announcement of the SMArt (Substitutable Medical Apps, Reusable Technologies) Challenge Apps are creating some fresh buzz. But what I find even more interesting is that broader tech accelerators like YCombinator, and 500 Startups are also starting to fund some health startups (checkout drchrono.com and Evoz).
While I am making my rounds, I cannot help but make a shameless plug for some of my ex Googler friends at 500 Startups. In case you have not heard of them yet, 500 Startups is a $40 million Super Angel investment fund that was founded by former PayPal executive, Dave McClure and Christine Tsai, former Google Marketing pro who ran Google I/O. They provide early-stage seed funding ($10K to $250K) and have over 140 experienced startup mentors around the world that help with product design and data and customer acquisition. 500 Startups holds a series of events on all kinds of things relating to startup success. In fact, check out the event they are hosting this Saturday, June 25th from 1-6pm called “‘Design a Healthy Startup: Prevent Burn Out.” This event will feature 500 Startup founders and entrepreneurs from HealthTap, EcoFactor, Google, Facebook and Zynga. Demos from cool new startups in the wellness space like Dojo, Habit Labs, and FitSquid, will also be presenting. Read more about the event or sign up to attend this Saturday.
Missy Krasner spent several years helping getting Google Health off the ground, and before that was David Brailer’s right-hand woman at ONC.
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So they constituted the best app developers can produce authentication and Open Graphical Record tie-ins, a Passbook app,
sweetenings on Siri and iCloud chits for partaked Safari browser checks on unlike buy iphone 5 devices.
anti Remember, the 4 if J.
P. Morgan’s lower berth gross sales anticipations for theiPad andMac prove exact.
It’s true. Getting More Startups Focused on Health will be beneficial. Managing health care needs is they key to the development in a society.
Matt – you are right – one of the jet setters! I stand corrected!
BTW – they announced the SMArt Challenge winner yesterday
http://www.healthcareitnews.com/news/smart-health-app-challenge-crowns-5000-winner
“At that time, nobody from CMS, AHRQ or even the White House was attending the Health 2.0 conference.”
Uh, some of us were presenting there… 🙂
http://www.h2anetwork.org/MeetingDocs/ahrq_BostonMeeting_422.ppt
Matt
Respectfully – We don’t need more $ pumped into medicine. We need more morality
Gary:
You bring up good point. While there is formal federal funding for HIT with HITECH, there is no parallel effort for health 2.0 applications. But I still think having agencies as well as the White House start recognizing the health 2.0 movement and substantiating it by putting out public data challenges via grants/prizes is a huge jump from what it was like when I was working at HHS/ONC. At that time, nobody from CMS, AHRQ or even the White House was attending the Health 2.0 conference. Now they are not only attending, but looking to support it with challenges. There used to be a huge East vs West coast divide when it came to Health IT and consumer health tech applications. What was happening with grants in the government world in DC was not at all connected to what was happening out West in the Silicon Valley. That divide is now closing.
Thank you for including the Health 2.0 Developer Challenge in the list of new government and industry funded initiatives. While it is hard to know how formal the funding streams will be from ONC/HHS and IOM at least there are some cash prizes being offered from the challenges themselves. See this blog – http://www.health2news.com/2011/06/09/6-new-challenges-launch-for-summer-2011/
For example, The Medicare Claims Data Developer Challenge sponsored by IMPAQ International and NORC at the University of Chicago offers a $7,500 cash prize. The Aetna Foundation Challenge on obesity data offers a $25,000 cash prize. The Walgreens Health Guide Challenge offers a $25,000 cash prize. The Public Data for Cancer Prevention and Control Challenge from the National Cancer Institute (NCI) offers two prizes of $20,000 each. And The Academy Health challenge, Relevant Evidence to Advance Care and Health (REACH) offers a $5,000 cash prize. We will see if these cash prizes are enough to get people excited enough to submit applications by August, 2011 to help push the health 2.0 innovation needle forward.
Until now, we’ve had some skepticism at this blog about consumer-focused health IT (http://tinyurl.com/6jjd3lg). I think Chilmark’s research is both compelling and sobering. If someone can figure out how to get consumers to engage meaningfully with health IT, it will be a great achievement.
I definitely think the time is right for a resurgence of funding for healthcare ideas. Without significant innovation, we will be unable to address the challenges, particularly the cost challenges, of our ailing healthcare system. Interestingly, it was just reported that 38 of the Fortune 50 companies are focused on the healthcare industry, so there is definitely a demand for products and services to feed the acquisition pipelines of America’s largest companies. Read more here about this topic–http://www.venturevalkyrie.com/2011/06/21/theres-gold-in-them-there-healthcare-hills/2333. This commitment to the healthcare marketplace among the large companies should be a catalyst for additional private equity and venture funding as the exit environment continues to improve for the smaller companies. One of the challenges for all the incubators is ensuring that they are funding sustainable companies, not just niche products that can’t attract follow-on funding as they mature.
AHA: Every organization has it’s own focus. Many specialty societies are now more aware of HIT and apps to support their specialties. I know from experience there is at least one iPhone app that is capable of taking an ECG. Whether it can be used to transmit to a remote location I don’t know.
Apps face the test of capturing physicians’ imaginations, and then the test of it’s use. Word of mouth travels faster than marketing. Seeding the market with free apps works well. Take DrChronos for instance which is an EMR based on the apple system. It took a convergence of software, and hardware (iPad) to fuel interest in this app.
At the American Heart Association, we understand the need for medical awareness in future startups. It seems that those who exist in the worlds of healthcare and medicine, only seek to continuing existing within those systems, instead of finding ways to move it forward and inject it into the mainstream. Our online education website, OnlineAHA, is geared toward preparing people for emergencies through CPR training, as well as certification training for basic life support (BLS) and advanced cardiovascular life support (ACLS). Things like this need to be in put in front of those looking to start small businesses, because otherwise they won’t find them. Great post.
There does appear to be a resurgence in venture capital funding for startups as well as mergers and acquisitions. This activity is high in the social media niche where there has been explosive growth in the past two years.
Although there is federal funding for HIT with HITECH, there is no parallel effort in health 2.0 applications. Federal funding is fraught with political intrigue, mandates without funding, and eventually the business model must be successful to succeed when the federal grants expire.
Judging from the Health 2.0 Developer Challenge there does appear to be some private equity working in the space. Several health related companies have entered the developers challenge, WalMart, Aetna Foundation,
The 2010 Health 2.0 Developer Challenge was launched on June 2nd, 2010 at the Community Health Data Initiative (CHDI) meeting at the IOM, with support from the Department of Health and Human Services (HHS). Initiated in March 2010, CHDI hoped to ignite innovation using newly opened government data sets. By that June meeting, several great applications had been created. (You can see video from that meeting here.)
The Health 2.0 Developer Challenge is supported by HHS but is being run by Health 2.0, the company that hosts the well known Health 2.0 Conferences. (The Health Care Blog-Matthew Holt)
It is unclear what support from HHS and the IOM really means. I could not find any sources describing financial underwriting. I have found a reference that ONC supports Health 2.0 efforts. Again it is a vague statement with no mention of startup funding.
The Health 2.0 Developer Challenge forums are held in conjunction with the Health 2.0 meetings in different locations in the U.S..and some in Europe as well.
Your article on THCB brings fresh light and exposure of startup funding for Health 2.0 to a broad audience.