Define Ventures Raises $460 Million To Invest in Digital Health Startups
The Silicon Valley firm has an impressive track record, having previously invested in top digital health companies including Hims & Hers, Unite Us and Folx Health
Define Ventures, a VC firm whose portfolio includes companies like Hims & Hers, has raised an additional $460 million to fuel its investments in early-stage digital health startups, the firm announced.
With the new funding, Define Ventures will continue its investment strategy, which the firm says “centers on partnering with startups that are serving multiple ecosystem partners, such as consumers, payers, providers, employers and life-sciences companies.”
The Silicon Valley firm has an impressive track record, having previously invested in top digital health companies such as Hims & Hers, Unite Us, Folx Health and Cohere Health.
The $460 million will be spread across two new finds. Fund III will go towards supporting new early-stage investments, while the Opportunities Fund will be used to support Define Ventures’ existing partner companies.
Define Ventures now has $800 million in assets under management. The firm says its one of the largest early-stage VC firms focused on investing in digital health.
“The healthcare system is evolving rapidly as multiple healthcare, technology and consumer trends converge, and even with the progress over the last few years, it remains a $4 trillion market opportunity that desperately needs greater digital transformation,” said Lynne Chou O’Keefe, Define Ventures’ founder and managing partner. “At Define Ventures, we are at the center of that convergence and combine the best of Silicon Valley thinking and deep healthcare operating experience to better understand how enterprise and consumer models will intersect to become the future of healthcare.”
For Define Ventures, the new funding comes as digital health startups are finding it increasingly difficult to raise cash. According to a recent market report from seed investor Rock Health, 2022 saw $15.3 billion invested in digital health companies in the U.S., down from $29.3 billion in 2021.
Only $3.4 billion was invested in Q1 of 2023, putting this year on track to see the lowest amount of funding for digital health companies since 2019.
The IPO market has also been ice cold. In 2022, only two digital health companies went public, compared to 20 in 2021, according to data from Digital Health Business & Technology. So far in 2023, there’s yet to be a digital health IPO.
Amid the current economic conditions, some experts have said they expect to see M&A activity increase on the digital health front, as companies look for alternative ways to raise cash and sustain their operations.