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Enterprise capital and healthcare startups have had a tumultuous relationship over the previous few years. Earlier than the pandemic, nearly all of enterprise funding in well being tech and healthcare startups got here from VCs targeted on the sector. That modified in 2020, when seemingly each taste of VC flooded into the market.
A lot of this newfound curiosity was seemingly pushed by buyers chasing pandemic tailwinds and reacting to FOMO versus a need to construct a long-lasting healthcare portfolio. In truth, many VCs retreated from the sector shortly after the world began returning to regular.
Not everybody did, after all; some determined to double down. Common Catalyst was a kind of, and that stance has resulted in an fascinating growth this week.
On the HLTH convention in Las Vegas final weekend, Common Catalyst mentioned it was launching a brand new initiative, Well being Assurance Transformation Company (HATCo). The brand new undertaking will work with the agency’s portfolio corporations and present partnerships with healthcare establishments to advance the idea of well being assurance, which goals to get shoppers to work together with healthcare offered on a proactive foundation.
Common Catalyst declined to touch upon the HATCo effort past the weblog submit it issued.
Now, a number of VC funds arrange such partnerships with giant entities for the sake of their portcos — usually replete with lofty objectives and mission statements — however this undertaking is totally different. Why? As a result of a key plank of the HATCo initiative is that Common Catalyst intends to purchase a complete healthcare system.
There’s so much to unpack right here
Why would a VC agency wish to personal its personal healthcare system? Why wouldn’t it need that stress or such a pricey asset when it may simply proceed with its healthcare partnerships?
It seems that Common Catalyst has been transferring on this route for years — and I’m not simply saying that as a result of I met a VC this week who appeared usually confused that folks have been so stunned by this information.
The enterprise agency had constructed a large healthcare startup portfolio effectively earlier than the HATCo announcement. In truth, it has been essentially the most lively VC investor in healthcare for the reason that starting of 2020, in line with PitchBook. The agency has raised greater than $1 billion particularly for well being tech startups thus far. It additionally launched a number of SPACs in 2020 on its hunt for corporations that might develop into well being assurance platforms.
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