Liazon, an online private benefits exchange, through a deal that came with an equity stake for Symphony. Founded in 2007, Liazon grew to 120 employees before it was sold to Towers Watson (NASDAQ: [[ticker:TW]]) in 2013 for $215 million.
Those exits and the growth of Symphony’s business have given Kalla the means to become an active angel investor in companies like 411.ca, a local search engine in Canada that was acquired in 2010 by Yellow Pages.
SymphonyAlpha, which Kalla manages with Symphony marketing director Tom Carmona, has invested in Elli Health, HighFive Health, and EM Opti in Wisconsin; Review Trackers and Starchup in Chicago; and Nogpo in New Jersey. Kalla also was a seed investor in Blue Cloud Ventures, and he remains an advisor to that New York-based venture fund.
Blue Cloud co-founder and general partner Rami Rahal is bullish on Symphony’s planned incubator because he thinks Kalla has found a “sweet spot” where, unlike some investors who stop being entrepreneurs, he’s able to continue running a healthtech company at the same time as he makes investments. That means Kalla can take advantage of his close access to healthcare providers and his industry knowledge to place smart, careful bets on startups he thinks he can help best.
“He might not make 100 investments, but I would watch the investments he makes closely,” Rahal says in an e-mail message. “He dedicates time to his portfolio companies and thinks of them as his own startups in a way, where he and the entrepreneur work together on growing the business. While this model might limit the number of possible investments, it also makes sure that the ones made have a much higher probability of succeeding.”
To start, the incubator will be funded by part of the $2.8 million remaining from Kalla’s initial investment in SymphonyAlpha, he says. The size of the investment in each incubator company has yet to be determined.
Symphony’s Madison office has room for three startups. The plan is for each company to stay in the incubator for a year at most, Kalla says. He believes that’s important because as competition continues to heat up in healthtech, the timeline for commercializing products must shrink.
“Nowadays, six months is already too long to bring [a product] to the market,” Kalla says. “People eat your lunch. It’s already obsolete.”
