Providence spins off venture capital arm

Providence has spun off Providence Ventures, its venture capital arm, 10 years after its formation.

The Renton, Washington-based health system said Tuesday it will remain involved with the newly named Allumia Ventures as a limited partner and has committed $150 million to Allumia over the next 10 years.

Related: Providence's next CEO outlines path to financial turnaround

Limited partners are organizations that invest in venture capital firms in hopes of making a return. A spokesperson said Allumia plans to partner with additional limited partners.

Providence’s VC spinoff comes at a tumultuous time for the health system. It suffered a $6 billion net loss in 2022, including losses related to its split from California health system Hoag, followed by a $596 million loss in 2023. The health system reported an operating loss of $155 million for the first nine months of 2024. It restructured its organization from seven regional divisions into three in July 2022, shrinking its executive team and funneling more money toward frontline workers.

Longtime CEO Dr. Rod Hochman left at the end of 2024 and was replaced by Chief Operating Officer Erik Wexler Jan. 1. Wexler has said his goal is to break even on operations by 2026.

Providence formed its venture capital arm in September 2014 with an initial $150 million investment made in 2015. A second $150 million fund closed in January 2019. 

Providence Ventures invested in 28 companies, with 10 of them exiting. In April, consumer engagement technology company Praia Health spun out and received $20 million from Providence Ventures and other investors. Some of its most notable investments have included primary care company One Medical, which was acquired by Amazon, and chronic care management company Omada, which investors have speculated is a candidate to go public. 

Jeff Stolte, who joined Providence Ventures in April 2022, will stay on as managing partner at Allumia.