Inova Health System will provide $100 million in venture capital over the next three to five years to support precision-medicine companies and create an incubator for startups. The goal is develop ideas to improve the broader health system and make money off the innovations.
The Falls Church, Va.-based system has brought aboard veteran venture capitalists Hooks Johnston and Pete Jobse to manage the investments, Inova announced Tuesday.
“Our goal is to seek out the latest technologies and get them quickly into the point of care at all of our facilities,” Johnston said.
Johnston was a co-founder and general partner in Valhalla Partners, a venture fund that has invested $440 million in 43 companies. Jobse was CEO of the Center for Innovative Technology. He also led an accelerator focused on cybersecurity.
Inova joins several not-for-profit hospital chains, including Ascension, that run venture-capital arms to spur medical innovation and participate in the early stages of their development.
Johnston said Inova's investments will focus on personalized health. That's a broad segment of emerging medicine that spans genomic research to identifying cell make-up in people so treatments can be tailored to each person.
Of the $100 million targeted for investment, about $50 million would be directly invested in technology companies, Jobse said. The other $50 million would go to other investment funds.
Inova is one of 13 health companies investing in Ascension's recently announced fourth venture-capital fund, he said. Ascension, the nation's largest not-for-profit hospital company, has had venture funds for nearly 15 years.
Nurturing technology companies with capital provides health systems with early access to innovations and gives a voice in governance, Jobse said. Inova expects to take a minority stake of 5% to 25% in the companies receiving its direct investment, Johnston said.
The accelerator is aimed at finding potential technologies that are very early stage, Jobse said. Each year, Inova plans to find six to eight startups through an application process and house them at the new Inova Center for Personalized Health with $75,000 in seed money and professional support, he said.
The businesses will be challenged to raise $250,000 from other investors—money that Inova pledges to match, Jobse said. Inova posted operating revenue of about $2.9 billion in 2015, according to the Modern Healthcare financial database.