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Insights from digital health’s most active investors

| May 21, 2015|Tags:

Last Friday we co-hosted the third annual Digital Health Investor Summit with Fenwick and West to a packed audience of investors specifically interested in the digital health space. Here are some of the day’s memorable moments:

  1. “Data is like air—it’s necessary, but you can’t sell anyone two ounces of it.” -David Brailer of Health Evolution Partners on collecting more and more data points, without creating value
  2. “It finally doesn’t suck. Technology can do video much better, waiting time is almost instantaneous, you can close the loop by connecting to pharmacy, and the market has really expanded with everyone having smartphones.” -Bob Kocher, Venrock on why telemedicine is so hot right now
  3. “The 5 Customer Journeys that matter: browse and shop, evolve with my needs, help me help myself, take control of my health, and help me in my time of need.” -Janet Widmann, Executive VP of Markets for Blue Shield of CA on the kinds of technologies payers are interested in investing in
  4. “Differentiated tech models are more important than ever” -Navtej Bhullar, Goldman Sachs on key investor perspectives from recent IPOs
  5. “Investors should focus on optimizing all the 4 P’s (patient, physician, provider & payer)” -Casper de Clercq, Norwest Venture Partners on whether high valuations will hold
  6. “It’s not about disruption, it’s about implementation.” -Jack Young, dRx Capital on how digital health companies are performing compared to other portfolio companies

Rock Health’s Malay Gandhi ran an interactive session regarding The State of Digital Health Funding (you can check out a breakdown here). The audience was live-polled on their feelings about the digital health investment landscape. Here are some results:

Sales cycles are the biggest concerns for digital health investors

digiital health challenges 2 rock health

 

Digital health investors believe companies are currently overvalued

rock health are companies overvalued?

 

And finally—on the bullishness of digital health investors:

digital health investing sentiment rock health

 

 

Deconstructing the Fitbit S-1

| May 11, 2015|Tags: , , ,

Fitbit is the latest iconic digital health company planning to IPO, with a drastically different operating history than another iconic company from last year’s group. Quote from Health Innovation Summit (2013).

Beginning early last year, whispers of Fitbit’s revenues started to circulate. Testing the numbers with investors, responses were mixed—some thought the figures were outlandish, and others confirmed them as absolutely true or undersold. This is the story of wearables, a polarizing category that has been misunderstood, underestimated, and perhaps wrongly maligned. And this narrative will shadow Fitbit’s public offering—with one journalist already calling it a “sucker IPO” and another praising the company’s “surprising profits.” Fitbit’s S-1 provides answers to questions many of us have debated for years, and leaves a number of others completely unanswered.

Objectively, Fitbit represents a tremendous growth story. In less than six years from the launch of its first device—and on the back of less than $70M in venture financing—the company has built a billion dollar plus revenue (run rate) business (at 50% gross margin), legitimately pioneering the category of “connected health and fitness” trackers. Regardless of any S-1 analysis, IPO price, or post-IPO price change, what James Park and his team have done at Fitbit should not be shortchanged. It is an incredible startup tale from a determined, visionary founder—a founder that no one wanted to fund. And yet here they are, on the cusp of an IPO.
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Rock Weekly: Deconstructing the Fitbit IPO

| May 11, 2015|Tags:

Rock Weekly

May 11, 2015

Digital health IPOs are finally heating up. Off the heels of another filing last week, both Fitbit and Evolent Health sent off S-1s to the SEC—each for $100M. No time to read all 130K+ words? Enjoy the tl;dr version of Fitbit’s filing we wrote just for you.

What’s next for these soon-to-be-public companies? The activity tracking pioneer will be defending against the Apple Watch, while, perhaps, population health management company Evolent can stem the rising tide of ER visits the ACA has not prevented.

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Taking over the boys’ club: learnings from the XX Retreat

| April 29, 2015|Tags: ,

XX Retreat Rock Health

Last month Rock Health hosted its sixth annual XX in Health Retreat bringing together over 200 women leaders in the healthcare field. The stellar list of speakers touched on a number of topics, ranging from deeply personal stories to broader lessons about how one can overcome gender bias and make your mark as a woman leader. Here are some learnings from the day:

“Women need to be bold enough for the responsibility of success AND failure.” -Mecca Santana, VP of Cultural Affairs and Diversity for Westchester Medical Center

Mecca Santana had a number of great quips during her panel session, but this quote struck close to home. Being able to talk candidly about failure inspired many to confront fears of hearing ‘no’ and risk-taking in general. One young woman at my lunch table spoke about her failed grassroots campaign to engage co-workers in addressing their company’s woman retention problem. The older women at the table contributed their thoughts regarding similar battles they’ve fought, and how in the long run they were able to come out on top. Though the approaches were varied, one woman spoke about “how keeping her head down and constantly producing good work” served her well, while others debated about when it’s time to give up the good fight and join a more positive work culture. The conversation ended with one of the table’s entrepreneurs extending a job offer to the frustrated young woman.

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Expanding our footprint: three new East Coast investments and a new office

| April 23, 2015|Tags: , , ,

Rock Health NYC officeThe new Rock Health office in the Greenwich Village neighborhood of NYC.

After eight wonderful years in the Bay Area, I recently moved to the East Coast to help broaden the footprint of Rock Health. We want to invest in great companies regardless of where they are located, and that’s just what we’re doing.

Today we’re announcing three investments we’ve made in East Coast companies.
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Rock Weekly: Who really owns your medical records?

| April 20, 2015|Tags:

Rock Weekly

April 20, 2015

Who owns patient records? Patients do—in only one state. From grandpa’s prescription history to your whole town’s genetic code—your data fetches dollars, and locking the records up affects the delivery of care. It would be nice to know who is storing what, especially in an era when consumers are increasingly at the center of healthcare.

On the topic of siloed data—our portfolio company Benchling just raised $5M to make the $180B world of life sciences research reproducible, searchable, and cheaper with their beloved digital lab notebook. Meanwhile, our own Clinicastjoined Elekta to help doctors use big data to better care for oncology patients.

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How to hack diabetes: The open artificial pancreas project

| April 10, 2015

Artificial PancreasCredit: Tim Omer

Jeff Engler, Entrepreneur in Residence, Rock Health

Rock Health’s mission is to power the future of the digital health ecosystem, and we generally work to achieve this through supporting amazing startups, partnering with industry-leading companies, and organizing events like the annual Health Innovation Summit.  I recently came across an initiative that doesn’t fit into these buckets but has a similar opportunity to transform the future of digital health, and wanted to write about them here in the hopes that folks who are reading feel inspired to join their effort.

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Radical consumer-first ideas are necessary to revolutionize healthcare

| March 25, 2015|Tags: , ,

Alejandro Foung, Co-founder and CEO, Lantern

With 14.1 Americans gaining coverage under Obamacare, more individuals than ever are getting access to healthcare. This is great. What’s not great is that healthcare still costs a fortune. Growing deductibles and out of pocket costs make great healthcare too expensive and inaccessible for many Americans. A few Americans can afford high-end services like concierge medicine and face to face therapy—premium services that a tailored to your needs.  Everyone else—from self-insured employers to individuals who need to find cheaper, better options—is driving demand for digital health products that are meaningful and easy to use.

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The State of Women in Healthcare: An Update

| March 23, 2015|Tags: ,

Exactly a year ago, we decided to publish the gender data on founders at Rock Health. Despite women being the majority of our team and our board, only 30% of our portfolio companies had a female founder (today, we are at almost 34%). Because we’d like to help our portfolio companies access a diverse talent pool, we began the XX in Health initiative nearly four years ago.

The aim of this initiative is to bring women together to network and support one another. The 2,400 members of the group share resources and ideas on LinkedIn and meet regularly across the country. This week we’re hosting a webinar on the topic for both men and women, and next week we’ll host our sixth XX in Health Retreat in NYC.

Today, through this initiative, we are proud to share our third annual report on the state of women in healthcare. Our past reports on this topic have been some of our most popular content, and we encourage you to share this report with your colleagues.

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The most important API you’ve never heard of

| March 11, 2015

Levin Brown is a MD/MPH candidate studying Health Policy and Management at Harvard School of Public Health.

Right now, one of the most important and exciting developments I’ve seen in health data is happening, and I really think you should be part of it.

Recently, a group of large EMR vendors and hospital stakeholders started exploring the new data exchange standard, HL7 FHIR. After many years of pressure, these vendors are sitting down together to discuss how to start exposing health data in a modern, consistent fashion. It’s taken a lot of work and leadership to get to this point and is going well so far—but now it’s time for the startup community to get involved.

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