Providence Ventures, the venture investing arm of Renton, WA-based health system Providence St. Joseph Health, says it has raised a $150 million fund to invest in early- and mid-stage healthcare technology businesses.
The venture firm says it will consider making investments across several areas of digital health, including healthcare information technology and Internet-connected medical devices. Providence Ventures says it expects to invest between $5 million and $15 million in each company it backs.
The firm’s parent organization, Providence St. Joseph Health, operates 51 hospitals and 829 clinics across several U.S. states, and estimates it covers 2.1 million patients, according to the organization’s website. Those locations, and the estimated 25,000 physicians and 38,000 nurses who staff them, represent a potential test bed for some Providence Ventures portfolio companies.
Providence Ventures launched in 2014, and the size of its first fund was also $150 million. The firm has led investments in the past, and says it may do so again using money from the new fund. Providence Ventures will likely also participate in rounds led by other investors, the firm says. Providence Ventures has already co-invested alongside 25 different healthcare venture capital firms, according a news release.
The announcement of Providence Ventures’ new fund comes at a time when many analysts continue to view the fundraising climate for healthtech startups as favorable. According to Rock Health, which tracks startup activity and venture funding in digital health, investors plowed $8.1 billion into the sector last year, up almost $2.5 billion from 2017. Some critics have argued digital health is in a bubble, however, and a reckoning is on the horizon.
Providence Ventures says it has invested in 15 startups since launching. One portfolio company, Boston-based Kyruus, uses data analytics to manage appointment-scheduling at hospitals and clinics, and to match patients and physicians. Kyruus raised a $10 million round of financing in April.
Seattle-based Xealth is another health IT startup backed by Providence Ventures. That company is developing digital tools allowing clinicians to prescribe devices and accompanying software designed to help patients manage chronic conditions, like diabetes. Providence St. Joseph Health previously incubated Xealth within the organization’s Digital Innovation Group.
