After its first venture fund spawned Livongo, the digital diabetes management platform—and former Fierce 15 winner—that went public in a $355 million IPO in 2019 and was acquired by Teladoc in a whopping $18.5 billion deal last year, 7wireVentures is hoping to strike gold once again.
The Chicago-based investment firm has closed its second venture fund, a $150 million pool that will be allotted to early-stage digital health companies developing technologies designed to improve the consumer health experience.
The new fund is backed by a group of limited partners comprising 7wire’s Connected Consumer Health Coalition. New and existing members of the coalition include health plans like Florida Blue and Cigna, hospitals and health systems such as Atlantic Health, Wellforce, Rush University Medical Center, Memorial Hermann Health System and Spectrum Health and large employers like Boeing.
Because 7wire begins each investment by identifying an issue in healthcare that it would like to solve, recipients of the firm’s consumer health-focused funding may be existing startups or new companies “hatched” by the venture fund to address those issues; Livongo, for one, was founded by Glen Tullman, managing partner of 7wire, to improve management of chronic conditions.
The fund’s first two investments fall into both of those categories. Earlier this month, 7wire co-led a $6.75 million seed funding for Jasper Health, which is developing a platform to help cancer patients navigate and manage their diagnosis and treatment. Lee Shapiro, another 7wire managing partner, also joined Jasper’s board of directors.
Meanwhile, Tullman is now serving as CEO and executive chairman of Transcarent, a healthcare management platform for employees of self-insured employers. In October, 7wire joined Transcarent’s $40 million series A funding round.
“Today’s healthcare system is more confusing, more complex and more costly than ever before. We started Transcarent to make it easier for people to stay healthy and enable employers to empower their employees and their families with unbiased information, trusted guidance and access to a broader range of choices, which will lead to higher-quality and more affordable care,” Tullman said when he stepped into the CEO role earlier this year.
Jasper Health, Transcarent and all other future additions to the new fund’s portfolio will receive more than just financial backing from 7wire. The firm also offers its companies introductions to potential partners, helps them recruit talent, guides them through the process of designing and preparing to implement a commercialization strategy and provides any other professional guidance the startups may require.
Outside of the new venture fund and his role as a serial startup executive, Tullman is also actively looking for digital health companies to take public. Last fall, he joined a handful of other backers in filing documents with the SEC to debut a new special purpose acquisition company, Health Assurance Acquisition Corp.
With a $500 million IPO now under its belt, the blank check company is on the hunt for digital health companies offering “consumer-centric, data-driven, cloud-based healthcare designed to help people stay healthy and avoid today’s ‘sick care’ paradigm” that it can spin out into Livongo-caliber success stories.