As healthcare undergoes its greatest transformation of the modern era, it’s clear that the monolithic system in place is crying for innovation, and venture capital (VC) funding is coming from some unexpected sources to spur innovation where it’s needed most in 2022.
The American Hospital Association (AHA) announced Tuesday (March 22) that it is getting into the VC game to help medical ideas become realities with solid backing.
In a statement on its website, the AHA said it is “providing early financing for investment funds run by leaders focused on improving health care access, quality and affordability.”
Funding New Healthcare Entrepreneurs
A look at some of the VC firms chosen shows a commitment to bring pandemic-era digital transformation to populations underserved by healthcare and lacking access to capital.
In its announcement, the AHA spotlighted SteelSky Ventures, a female-led venture firm focused on companies working to improve womens’ health outcomes. It invests in medical devices, consumer health, digital health, healthcare delivery, ePharmacy and retail therapeutics.
In January, the AHA started the initiative, announcing that HCA Healthcare, Atrium Health, the Henry Ford Health System and LHC Group are among the fund’s investors and strategic healthcare partners creating the Jumpstart Nova Fund.
The AHA said Jumpstart Nova will invest exclusively in Black founded and led companies in the healthcare ecosystem that focus on improving access and affordability in underserved communities.
“Hospitals and health systems need strong partners to collaborate with to build healthier and more equitable communities,” AHA President and CEO Rick Pollack said at the time. “Jumpstart Nova aims to provide talented but too-often overlooked entrepreneurs with the capital they need to advance this important work.”
Bringing Equity to the Sector
In its own announcement of the new fund’s formation, Jumpstart Nova noted that of the 785,000 companies in the U.S. healthcare sector and only 35,000 businesses are Black-owned.
“That amounts to less than 5%,” Jumpstart Nova said in the announcement. “In the midst of the COVID-19 pandemic, two issues captured America’s attention: healthcare and racial equity. Jumpstart Nova created a unique opportunity for investors to address both issues simultaneously.”
As more companies disintermediate a healthcare system that is neither affordable nor accessible for millions of people, VC money flowing in is at the highest level in years.
PYMNTS reported in November that “investments in global health technology startups have skyrocketed this year, hitting $51.3 billion, a staggering 280% increase from 2016 levels, according to recent data from London & Partners and Dealroom.co. One of the countries driving this growth is the United Kingdom, which has the second-highest number of HealthTech companies that have received funding since 2016 (1,090), behind the United States (6,551).”