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 centered 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 traders chasing pandemic tailwinds and reacting to FOMO versus a need to construct an enduring healthcare portfolio. The truth is, many VCs retreated from the sector shortly after the world began returning to regular.
Not everybody did, after all; some determined to double down. Normal Catalyst was a type of, and that stance has resulted in an fascinating growth this week.
On the HLTH convention in Las Vegas final weekend, Normal Catalyst stated it was launching a brand new initiative, Well being Assurance Transformation Company (HATCo). The brand new undertaking will work with the agency’s portfolio firms and present partnerships with healthcare establishments to advance the idea of well being assurance, which goals to get customers to work together with healthcare supplied on a proactive foundation.
Normal Catalyst declined to touch upon the HATCo effort past the weblog put up it issued.
Now, a whole lot of VC funds arrange such partnerships with massive entities for the sake of their portcos — typically replete with lofty targets and mission statements — however this undertaking is completely different. Why? As a result of a key plank of the HATCo initiative is that Normal Catalyst intends to purchase a complete healthcare system.
There’s quite a bit to unpack right here
Why would a VC agency need to personal its personal healthcare system? Why wouldn’t it need that stress or such a expensive asset when it might simply proceed with its healthcare partnerships?
It seems that Normal 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 typically confused that individuals had been so shocked by this information.
The enterprise agency had constructed a large healthcare startup portfolio nicely earlier than the HATCo announcement. The truth is, it has been essentially the most energetic VC investor in healthcare because the starting of 2020, in keeping 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 firms that might change into well being assurance platforms.
