CHICAGO — At the HIMSS23 Venture Connect event on Wednesday, panelists how their investment strategies are changing in a slowed funding landscape.
“It is certainly an investor-friendly environment. And it’s not to say that we’ll take advantage of that, per se, but I think the entire reset brings us to more rational levels,” said Milind Parate, managing director of ventures at Northwell Holdings, the venture arm of New York-based health system Northwell Health.
Sonal Panda, principal at Tau Ventures, said the firm concentrates on providing funding for companies at the seed stage.
“Valuations have corrected. They’ve come down. While it’s good for investors, it’s also good for startups,” Panda said. “We’re seeing companies be a little more cash conscious, capital conscious and allocate capital better, so that it’s not just with one bank.”
Ben Wanamaker, vice president of enterprise strategy at Humana, said he wants to offer a ray of sunshine for those worried about the funding environment.
“When we look at the last two years, it feels a little sadder today than it did two years ago,” Wanamaker said. “When we look at the five-year, 10-year horizon, there has never been a better time to be investing in or building digital health technology and systems.”
Each panelist highlighted the kinds of investments their companies are looking to fund, with Wanamaker noting that Humana is focused on senior care in the U.S., care delivery capabilities and value-based care.
Panda said chronic care management and mental health are their funds’ primary areas of focus, though AI offerings are on its radar.
“What we wish we could see on the generative AI side, we want to go there, but there’s a lot of noise as well,” Panda said. “It’s really hard to pinpoint which one actually has the technology and strategy that will last.”
Northwell has a flexible mandate with a broad focus on general offerings that will permeate throughout the health system, Parate said. Oncology is top of mind as well as age tech and nutrition. The firm would also like to focus on management and workforce challenges, like burnout, and labor issues with health systems.
Each panelist said they would prioritize solutions that can address several of these issues at once rather than point solutions that focus on one disease or diagnosis.
“You can imagine a health system going through a digital transformation and having to maneuver multiple types of EMRs or point solutions, all these disparate solutions. The whole purpose in this digital transformation is to get away from that,” Parate said.
Additionally, panelists noted they look for startups that can demonstrate a founder’s ability to execute, build a team and prove the company’s value proposition.
“Beware of thinking you’re an anomaly,” Wanamaker said. “It’s perilous territory from a business model perspective.”