Ascension Ventures is in full-on investment mode, having already made six investments in about five quarters from its fourth fund.
Matt Hermann, senior managing director of the venture capital arm of Ascension, said he expects to invest in around 20 companies overall from the fourth fund, which closed fundraising at $255 million in the fourth quarter of 2016. Ascension Ventures invests in healthcare services, healthcare information technology and medical devices.
Although Hermann did not disclose the amounts of the six investments, he said the decisions are a collaborative effort between Ascension Ventures and its 13 health system partners, including Ascension, who together assess investments in potential startup ventures. Those systems are: Adventist Health System, Carle, Catholic Health Initiatives, CentraCare Health, Children's Health, Dignity Health, Inova, Intermountain Healthcare, Mercy, Novant Health, Ohio Health and OSF HealthCare.
"We want to make sure we're developing companies that across the spectrum can help our health system partners," he said. "We want as wide a lens as possible."
Ascension Ventures has invested in 62 companies during its nearly 17-year history, 24 of which are active today, Hermann said.
"I'm very proud of our performance on the distribution side," he said.
Hermann said he sees "tremendous opportunities" in using IT innovations to cut costs. The number of companies investing in digital health startups is increasing dramatically and, as a result, the value of the companies they're pouring money into has also gone up, he said.
"As you know, with respect to our model, financial return matters," Hermann said. "When valuations get one, two, three years ahead of where the business is, it makes it really hard to produce appropriate risk-adjusted returns."
