7wireVentures, one of the country’s biggest digital health-focused venture capital firms, launched a $217 million fund on Tuesday — its largest to date. The closing of the fund brings the Chicago-based firm’s assets under management to more than $500 million.
The team at 7wireVentures plans to deploy the fund’s capital over the next three to four years, said Robert Garber, who is a partner at the firm.
Two-thirds of the fund’s capital will be allocated to 7wireVentures’ existing portfolio companies for follow-up investments, and the remaining third will go toward Series B and Series C funding round for companies in which the firm hasn’t yet invested. 7wireVentures has about 25 portfolio companies as a result of its two previous digital health funds, Garber noted.
When choosing which startups to add to 7wireVentures’ portfolio, Garber said the firm will look closely at whether a company aligns with its “informed connected health consumer” thesis. This thesis, which drives the firm’s investing strategy, posits that technology, shared data and aligned incentives can empower patients with the knowledge and resources they need to manage their own health.
The informed connected health consumer thesis has been a integral part of the previous investments 7wireVentures has made. For instance, Jasper Health, one of the firm’s portfolio companies, is a care navigation platform that provides oncology support resources and actionable insights to patients with cancer, as well as their caregivers. The startup’s platform enables patients with cancer to take a more control in their care journey, pointed out Alyssa Jaffee, a partner at 7wireVentures. Patients often have less complications when they become more involved in the maintenance of their health — this not only improve patient outcomes, but i can also lowers costs for payers.
Another portfolio company, Zerigo Health, allows patients to manage their own UVB light therapy treatment for chronic skin diseases like psoriasis and eczema using an app on their smartphone. This makes things convenient for patients, while also reducing unnecessary healthcare utilization that drives up costs for payers and puts strain on providers.
7wireVentures plans to invest in companies that make technology for various sectors within the healthcare industry, including payers, providers and pharmaceutical companies, Garber explained. Some key areas the firm wants to see startups innovate include chronic disease, behavioral health, aging in place, and underserved populations, he added.
The firm has already made three investments out of its new fund. One of these went to a 7wireVenture portfolio company, NOCD, which virtually connects patients with obsessive compulsive disorder to therapists who specialize in treating their condition. The firm also invested in Folx Health, a virtual care platform for LGBTQ patients, and Parsley Health, a specialized virtual clinic designed for complex chronic patients.
Receiving an investment from 7wireVentures means much more to startups than just a cash influx, pointed out Jaffee. She said that she and the other investors at the firm pride themselves on how hands-on they are when it comes to growing their portfolio companies’ business lines.
“We’re all operators. We’ve all built companies and scaled companies. We know what it’s like to be in the trenches in healthcare and to make that happen, so we’re not the kind of investor that just shows up once a quarter to your board meeting. We really are committed to talking to you weekly — sometimes daily — to do whatever needs to be done to help you be successful,” Jaffee declared.
For example, Lee Shapiro, a managing partner at 7wireVentures, has previously served as CFO of Livongo, and Tom Richards, an operating partner, came to the firm after spending more than 35 years at Cigna.
Another aspect that sets 7wireVentures apart from other venture firms is its singular focus on digital health, Garber added. He said that building B2B companies focused on addressing the cost of care and improving health for consumers is “all we do.”
All members of 7wireVentures’ investing team have been “operators in healthcare over the last 30 years,” he added. This helps the firm ensure that it can offer subject matter expertise to startups to help them accelerate things like completing commercial agreements, building teams to scale product development and navigating regulatory requirements, Garber said.
“When the market was really flying a couple years ago, a lot of money flooded into space — but a lot of that money didn’t realize how challenging the health ecosystem is. It’s hard, it’s complex, and there’s a lot of perverse incentives. Having lived in this world for the last 30 years, I think we have been able to leverage that experience to help avoid many of the pitfalls that startups face,” he explained.
To date, there have been four successful exits among 7wireVentures’ portfolio companies — Livongo, Lightbeam Health Solutions, Higi and Yaro. The most notable among these is Livongo’s IPO, for which the company raised $355 million.