GFC Health+Bio: A Brief Intro!
Partnering with top founders and investors across early-stage health+bio
Happy Holidays!
In early 2019, we quietly launched our new health+bio practice at Global Founders Capital (GFC). Our basic intent was clear — to fill the capital void in the pre-seed and seed markets across healthcare and bio. And, in doing so, we can serve as a catalyst to the downstream market by working closely with top founders at the earliest, most malleable stages of their company’s life cycle. We made the conscious decision to work hard and stay heads down before we ever blog or podcast about our work. For good reason, we want our portfolio to do our talking.
TL;DR
@ Founders — GFC is one of the most active early stage health+bio venture funds. Read below how we partner with founders and where we are investing. If you are raising capital then let’s talk!
Founder Checklist (what we’re looking for & how we partner with founders):
- Sector Focus. We actively invest across the healthcare & biotech sectors.
- Early Stage. Our preferred entry point is Pre-Seed through Series A.
- Highly Active. We have partnered with 20 companies in 20 months.
- Top Speed. For the best founders we have invested in <48 hours.
- Flexible. We can lead or syndicate across any financing structure.
- Founder Engagement. We act as true partners with our founders.
- Lifecycle Partner. We can invest across a company’s entire lifecycle.
- Capital Deployment. We will deploy >$200–300M in the coming years.
@ Investors — We are highly collaborative and seek to catalyze a downstream (Series A and beyond) health+bio market. We expect 8–9 portfolio companies raising competitive Series A & B rounds in early 2021. Please reach out to learn more!
GFC Health+Bio Vision
In less than 2 years we have built a core team (we’re hiring!) and have quickly amassed one of the largest early stage health+bio portfolios. We are now one of the most active early stage health+bio practices, if not the most active, and we expect to have upwards of 20 health+bio portfolio companies by 2020-end. Our portfolio companies include Nomi, Clever Care, Sirona Medical, Atlas Health, Clara Health, Centaur Labs, Rupa Health, Astrid, Bennie, Valo Health, Abintus Bio, Aether Biomachines, and many more currently in stealth.
As we move into 2021, we can assure you that we are not slowing down — in fact, we believe that the coming decade will represent a golden era for unprecedented innovation across our industries. In the next 5 years, our intent is to unleash our capital firepower by backing the very best health+bio founders at their earliest company stages.
Looking Ahead: Sectors We Are Excited About in 2021
Health:
Modern Payment & Data Rails: Direct Health & Novel Insurance. We fundamentally believe that how we underwrite and finance our healthcare is broken. Very few of us, whether as individual consumers or employers, get much bang for our healthcare dollar. Startups that can innovate novel economic and data rails that better underwrite individual and population risk and can materially reduce premium spend to employers and individuals are in need. Creative approaches can be taken to modernize the traditional benefit design that incentivize prudent economic behavior and optimize premium dollar utilization. We believe that new direct health products serving the employer market and novel insurance (-like) products serving the individual market will flourish in the coming years.
Virtual Care Enabling Infrastructure. We remain excited about the future of virtual care delivery which we expect to become ubiquitous within the broader healthcare delivery system in the next 5 years. However, while excitement is at an all-time high, virtual care represents an all-encompassing ecosystem that is still in its infancy. We are highly motivated to invest in the enabling infrastructure that will underpin a comprehensive virtual care ecosystem. Specifically, it includes technologies that seamlessly integrates telehealth with clinical lab capabilities and at-home diagnostics, remote patient monitoring (RPM), distributed care team workflows, amongst others. We expect payment parity and the reimbursement environment to become increasingly favorable to the virtual care industry.
Interoperability. True interoperability continues to represent a “holy grail” for us. While regulators have provided (mostly) clear interoperability / data sharing guidance for what providers and payers now must do, it is less clear how consumers will respond. New data rails that optimize critical provider and patient touch points, facilitate clinical team-based workflows and system-side data integration functionality, and drive necessary patient engagement are needed. Furthermore, improved data security and privacy measures across a longitudinal patient care journey are required to strengthen and maintain patient-physician trust. Lastly, we expect that true interoperability will allow us to better underwrite our individual care journey and we are excited to partner with startups that marry interoperability with novel financial instruments.
Consumer Experience. We are enthusiastic believers that direct-to-consumer (D2C) healthcare products and models can and will become BIG businesses. Our belief is that in 2021 we will continue to see condition-based D2C products build and scale. And, in healthcare, “niche” conditions can affect millions of people and represent multi-billion dollar market opportunities. For instance, polycystic ovary syndrome (PCOS), a chronic condition affects 1 in 10 women of child-bearing age. And, upwards of 50% of these women go undiagnosed due to a complicated, messy care journey, which results in a massive problem without any clear and easily accessible market solutions. Interestingly, we find that many of these condition-based approaches can serve as “lead gen” platforms to identify common, related conditions, which can thereby directly inform product roadmap and commercial strategy. Our ‘niche’ categories can represent millions of individuals and hundreds of millions, if not billions, in healthcare spend.
Endless Healthcare Wishlist. The fact remains that the US healthcare system is a broken $3.8+ trillion industry and we aim to help as much as possible. Other areas of interest include but are not limited to:
- Home-Based Health. We unequivocally believe that an increasing amount of healthcare services will be had within the home.
- Decentralized Clinical Trials / Clinical Research. Decentralized trials that drive increased trial participant diversity, richer real world evidence (RWE) collection and increased clinician participation.
- Healthcare Workforce Support. Increased adoption and career viability for all healthcare workers creating a dynamic gig economy as well as workflow technology that aids seamless care delivery versus placing an increased burden on these individuals.
- Modern Managed Care. Both payers and providers have demonstrated financial performance via value-based contracts (vs FFS); we expect the Medicare Advantage (MA) market to continue growing as well as the ecosystem of startups selling into the older adult market.
- Food & Sustainability. What and how we eat must change in order to reduce our chronic disease burden. We will continue to invest in how we access affordable food options as well as novel foods and ingredients. Furthermore, we must consider how our health outcomes are directly tied to the health of our planet — climate change and sustainability are absolutely part of the health(care) conversation.
Lastly, healthcare is an event driven business where typically ‘events’ are characterized by policy and regulatory changes (and, sometimes generational black swan events!). While a formal policy deep dive is too much for this write up, we remain acutely sensitive to how recent, and expected healthcare policy measures, affect our industry and create new investment opportunities.
Bio:
AI in Therapeutics. Over the last 5 years, we’ve seen the rise of startups applying AI to the biopharma industry. The drug discovery and development process takes a multi-disciplinary team across biology, chemistry, and pre-clinical and clinical development, and yet various AI tools have been developed to solve one specific problem across the complex biopharma value chain. Having made bets in first generation AI drug discovery companies that leverage AI to design gene therapy and to rapidly surface lead molecules based on patients and their subpopulation’s biology, we are excited by how the field has rapidly evolved. At GFC, we’ve backed cutting-edge startups that use quantum-inspired algorithms to predict protein folding, discover novel protein therapeutics from multi-parameter datasets, discover novel disease-target relationships through proprietary, longitudinal clinical datasets, predict and optimize clinical trial success, and leverage molecular dynamics simulation for multi-valent drug discovery.
Novel Chemistry Platforms. We are seeing next generation small molecule therapeutics leveraging latest technologies and medicinal chemistry advancements to design novel molecules. The rise of computation has enabled in silico modeling of proteins and ligands. We are seeing companies leveraging molecular dynamic simulation to design the next generation multi-valent small molecules. In addition, encouraged by the the success of PROTAC to explore beyond the known rules of drug-like chemical space, we are excited by innovations that use the strategy in reverse to design binders that recruit deubiquitinases to cleave the ubiquitination of proteins, in a new modality to restore protein function.
Gene Therapy & Delivery. There’s been an undeniable rise of gene therapy technologies over the past few years, and many therapies have now reached the clinic. We are in the era of therapeutic delivery. We saw various delivery mechanisms beyond the traditional ADCs, which include antibody-CRISPR, novel RNA constructs for cell-specific expression, and optimized tropism of AAV and lentiviruses. Albeit with the clinical set back in AAV this year, we are seeing a rush of companies going after the design and manufacturing of therapeutic delivery vehicles and many M&A activities. With a variety of bioengineering tools at our disposal, we are seeing the optimization of delivery vehicles taking on less biological risk and more engineering risk, enabling rapid development and commercialization of such technologies. This year, we’ve backed an innovative biotech using gene therapy to transduce cells in vivo to make them into various effective cells, including CAR T cells.
Synthetic Biology. We saw exciting companies that can do whole-chromosome insertions in genome editing, as well as designing potent cytokines that lose activity outside of the tumor. Outside of therapeutics, we are seeking companies bringing automation and computation to speed up biological experiments for various applications. An example application is enzyme engineering. From first generation companies such as Codexis and Novozyme that use directed evolution to second generation companies such as Zymergen that increases the throughput of enzyme design-build-test experiments using AI and automation, we are backing the next generation of companies innovating on hardware, software, or biology to further increase the experimental throughput the generalizability of the AI models to predict novel chemistry reactions.
Medical Robotics. Surgical robotics continues attracting more fundings in 2020, intensifying the competition. Endoluminal robots have become the next trend because they provide less invasive surgical procedures, with Intuitive Surgical, J&J, and Medtronic making moves in this area. While the current functions of endoluminal robots are limited, it has the potential to take on endoluminal general surgeries and expand into vascular surgeries. Although many players are entering the general surgery and orthopedic areas, innovations in specialties (ophthalmology, ENT) and new applications (aesthetics) are worth noticing. Furthermore, the rapid adoption of telehealth this year brought the need for expansion of telehealth features, including automated triage, RPM solutions, and remotely controlled diagnostic robots for specialty care access at point of care.
We continue to believe in the interdisciplinary approach of combining computation, engineering, and biology to catalyze the next breakthrough. We feel extremely excited and fortunate to have the opportunity to support these next generation founders developing cutting-edge technologies pushing the frontier of biology.
If you are a founder thinking about or actively building a startup in the health+bio space then let’s talk. We would love to hear from you!
Sean’s email → sean@globalfounderscapital.com
Yizhen’s email → yizhen@globalfounderscapital.com
