Optum Launches $250M Venture Fund to Invest in Digital Health Firms

Nov. 29, 2017
Optum, the health services business of UnitedHealth Group, announced this week the launch of Optum Ventures, a $250 million venture fund focused on investing in startup and early-stage companies in the digital health care space.

Optum, the health services business of UnitedHealth Group, announced this week the launch of Optum Ventures, a $250 million venture fund focused on investing in startup and early-stage companies in the digital health care space.

Optum Ventures invests in digital health companies that use data and insights to help improve consumers’ access to health care services and how care is delivered and paid for, and that make the health care system more reliable and easier to navigate, the company stated in a press release.

“Optum Ventures is uniquely positioned to help develop and grow startups and early-stage companies through capital investment, Optum’s decades of experience in health care, and our access to the health care marketplace,” Larry Renfro, CEO of Optum and managing partner of Optum Ventures, said in a statement. “Optum Ventures will be the partner of choice for companies developing innovations that help make health care work better for everyone.”

The launch of Optum Ventures was announced during an analyst day in New York on Tuesday. According to a CNBC article, UnitedHealth is forecasting 2018 revenue growth of roughly 12 percent, to $223 billion to $225 billion. The main growth drivers are expected to be the company’s Optum data analytics and healthcare services business, and growth in the Medicare Advantage membership on the health insurance side, CNBC reported.

UnitedHealth Care, and other healthcare companies, are facing increasing pressure from tech heavyweights like Amazon and Apple. According to reporting from CNBC, Renfro was asked about the potential threat of Amazon and other tech companies entering the health care market and he said the company is “trying to catch up when it comes to early state companies.”

According to the Optum press release, entrepreneurs working with Optum Ventures will gain capital investment as well as strategic guidance to support development and growth from a vast network of experts and relationships. “Optum’s unparalleled health care assets and analytics capabilities provide a unique proving ground to research, test and innovate new solutions in collaboration with Optum’s broad and long-standing relationships and knowledge of how health care systems work and perform,” the company stated.

By leveraging Optum’s health care market expertise and experience, Optum Ventures and the companies it invests in will be able to bring solutions to market more quickly and scale faster, helping build a health care system that is more transparent, personalized, precise and consumer-focused, the company stated.

Among the fund’s first investments are Apervita, a company that developed a cloud-based pharmaceutical platform; Buoy Health, which has developed an artificial intelligence-powered digital health assistant that helps patients better understand their symptoms and get advice on where to go and what to do next; Mindstrong Health, whose technology uses machine learning and artificial intelligence to assess a patient’s smartphone interactions to help diagnose and treat neuropsychiatric and neurodegenerative disorders such as depression, schizophrenia and post-traumatic stress disorder.

Another initial investment for Optum Ventures is SHYFT Analytics, which provides a cloud-based data and analytics platform for life sciences companies, enabling them to reduce cost and risk while increasing clinical and commercial performance, with a focus on oncology, cardiovascular disease, diabetes, and other specialty and rare disorders.

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