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Despite a tough funding environment for digital health startups, 7wireVentures, a healthcare-focused VC, has created a $217 million fund dedicated to later-stage digital health startups, the firm announced on October 3.
The VC raised the money amid an overall downturn in digital health investments in 2023, with Q3 seeing the lowest funding levels since 2019. 7wireVentures plans to use the fund—which it’s calling the Growth & Opportunity, or GO, Fund—to boost digital health companies it believes can solve major problems in healthcare.
“There’s so much rhetoric in the market today about, ‘There’s no capital, the market is so hard, it’s so challenging to get funding,’” Alyssa Jaffee, a partner at 7wireVentures, told Healthcare Brew. “I do think that there’s a lot of reasons to be opportunistic, and to see the light at the end of this tunnel.”
7wireVentures has already invested in three startups via the GO fund: NOCD, a mental health company that specializes in obsessive-compulsive disorder treatment; Folx Health, a virtual healthcare provider geared toward the LGBTQIA+ community; and Parsley Health, a virtual complex clinic that treats patients with complex chronic illnesses and works to lower the cost of care. Each investment was between $10 million to $15 million, Jaffee said.
All future initial investments from the GO Fund will also be between $10 million and $15 million, and startups may receive up to $25 million in total from the GO fund over multiple investments, Jaffee said.
Jaffee told Healthcare Brew that 7wireVentures was able to raise the money for the GO Fund despite the challenging environment by finding investors who believe in the future of digital health.
“We found those investors in droves, those investors are absolutely there,” she said. “There’s an appetite across the board for this type of investment and to build these types of companies.”
Jaffee said 7wireVentures plans to use the GO Fund to invest in digital health companies it believes have “massive opportunities,” adding that one important element is “founder-market fit.”
“You read in business school case studies about product-market fit, which is important, but founder-market fit in healthcare is so impactful because there are a lot of problems in healthcare,” Jaffee said. “It is really, really hard to build a big business. It takes a lot of smart people at the table, and it takes somebody who’s doing this more than just for money—somebody who understands this problem so acutely and innately that they are willing to dedicate their entire lives to fixing this problem.”