Define Ventures, a enterprise agency whose portfolio consists of well-known early-stage startups in Silicon Valley, acquired $460 million in Fund III and Alternatives Funds and is trying to develop its investments in digital well being.

The agency invested in Folx, which provides digital healthcare companies for the LGBTQ+ group, hybrid ladies’s healthcare supplier Tia, digital care administration platform DexCare, healthcare-management platform Laudio and lots of different startups. 

Lynne Chou O’Keefe, founder and managing accomplice of Outline Ventures, sat down with MobiHealthNews to debate the corporate’s latest elevate and the kinds of early-stage digital well being platforms in Silicon Valley it seems to put money into. 

MobiHealthNews: What sort of digital well being corporations are you trying to put money into with the funds garnered in April?

Lynne Chou O’Keefe: With the $460 million for our Fund III and Opportunities Fund, it makes us one of many largest early-stage digital well being funds. And we actually give attention to the convergence of healthcare, as a result of we’re deep healthcare operators with Silicon Valley ideas and what’s occurring in know-how, and actually additionally unlocking client influences.  

We have now this analogy, which is we’re rebuilding the home of healthcare and that begins with what we name the entrance door or we’ll name it a client gateway.  

How folks enter into the well being system, we imagine, is altering, between well being and wellness, psychological behavioral well being, and coming in and having these wants is quickly evolving with the consumerization of healthcare.  

We are saying when you enter into the home, you are on the muse layer of that home. And each scientific choice, each enterprise choice, rests on what we name knowledge liquidity and analytics. We actually imagine that, to present folks customized care, you must not solely perceive the scientific knowledge and the claims knowledge, but additionally dwelling knowledge and community-based knowledge, as we clearly march to extra value-based care sooner or later. 

So if we’ve got the precise scientific knowledge, claims knowledge, dwelling knowledge, community-based knowledge, we will now stroll you thru the hallways of the home to a extra customized expertise, the place healthcare is delivered within the rooms, which is de facto tech-enabled service, digital therapeutics.  

After which the final space we are saying is vertical reimagination. So we are saying full-stack homes, these are the brand new entrants that may form of are available in and compete with the incumbents and full platforms, which have all these components constructed collectively.

MHN: Is there a kind of firm you are trying to put money into, particularly? AI or generative AI-focused corporations, for instance.

O’Keefe: We put money into each incubation, seed, Sequence A and Sequence B. So the query of what you might be searching for completely is determined by stage. We have invested in a group of two folks really with a PowerPoint and an concept, and we have invested the place we have been a part of $140 million Series B in value-based care. So we do search for various things.  

Because it will get to generative AI, in fact, it is just like the meteorite hit, proper? And, you realize, ramifications are nonetheless but even to be found. However one factor, having been in healthcare and having operated in healthcare, that I feel we at all times have to return again to, particularly residing within the valley and understanding know-how, is, to me, I’ll say considerably of a daring assertion: It is by no means in regards to the know-how. It is in regards to the use case.

So, as a substitute of asking a query, “What is the generative AI firm you are searching for?” I consider it extra as, “What’s the drawback or the necessity or the use case I am making an attempt to unravel for a supplier, a payer, a life science firm, an employer or the patron, and are LLM fashions an inflection level for that use case to be solved?”

I’ve seen these generations of applied sciences over time. If it wasn’t generative AI, it was blockchain earlier than that, and so on. And I feel healthcare works in a method the place, we’re in all probability not the primary to make use of applied sciences versus different sectors, however we’d like assist in healthcare, as a result of we’d like know-how enablement to drive use instances, to drive worth and to drive ROI [return on investment]. 

MHN: What are some crimson flags once you hear a pitch?

O’Keefe: There’s the age-old market. The timing of that chance is extremely vital. And I additionally say, “Can this mannequin be versatile in some instances, in a fee-for-service world and a value-based world, as we’re marching on this journey of the healthcare system. Does the founding group actually perceive the use case?” You realize, in the event that they’re simply throwing lots of language about generative AI, however cannot actually articulate how is the payer going to make use of this and discover ROI inside a yr? How can we take into consideration go-to-market movement, and what is going to this product and resolution differentially resolve? And is that this the group to deliver their experience to make this imaginative and prescient a actuality? 

And for healthcare, one factor I’ll say is, and particularly in digital well being, the go-to-market, that understanding, I feel, that is the place Outline may be very useful. We imagine in defining partnership. It is one among our core values. However we additionally want an entrepreneur who’s performed their homework, and we are going to increase that by our networks, our expertise, and we are going to adapt our go-to-market fashions. However somebody who understands that. And it is advisable know that on day one.