Israel-based equity crowdfunding platform OurCrowd is launching a sector specific fund fully focused on digital health — touting it as Israel’s first fund with such a focus. The fund, called OurCrowd Qure, will invest in early stage startups at the seed and Series A level. Fundraising is starting now, with a target of $50 million for the first raise.
Managing partner Dr Yossi Bahagon tells TechCrunch the team expects to make about 15 investments with the first fund. He says typical investments will start at $500,000 for the earliest stage startups, rising to up to about $3 million at the Series A level.
Bahagon, who has a digital health startup background of his own (including founding Luminox Health), is leading the fund with managing partner Allen Kamer. The pair are contributing one per cent of the fund themselves, with the rest coming from OurCrowd’s global network of circa 15,000 investors.
The fund won’t be exclusively investing in Israeli startups although a majority are likely to come from the region, says Bahagon, talking up the quality of homegrown startups on account of the country’s firm embrace of digital healthcare.
“Israel is one of the most advanced countries with regard to digital health. 100 per cent of the Israeli healthcare system is digitalized, both at the level of the healthcare system and at the level of the patient,” he says, going on to name check a few examples of local innovators — such as diabetes prediction and prevention platform Sweetch (which he actually co-founded) and Tytocare, a startup that’s developed a remote physical examination device for telemedicine.
Qure has already made its first investment, co-investing with Khosla Ventures in Israeli medical imaging and machine learning startup Zebra Medical.
Artificial intelligence, big data, genomics and connected healthcare devices are areas of particular interest, says Bahagon.
“There are several startups that we are already looking at in these domains,” he tells TechCrunch. “The general notion of the fund is to invest in companies that bring better quality of care with more efficiency and less cost.”
One notable element is a collaboration it has established with Johns Hopkins University in the U.S. — which it says is aimed at fast tracking startups’ market access by linking them to the research organization and its network, including links in to the US healthcare system.
It’s also a link that Qure will be using to help it sift through potential investments. “We can validate, through this connection, the ideas that come to us so we can differentiate the best startups out there and connect them with the heart of the US healthcare system,” says Bahagon.
The collaboration with Johns Hopkins is the first of several planned partnerships — with “international leading companies”, as Bahagon puts it — which are aimed at supporting Qure’s portfolio companies to prove out early stage ideas and get digital health products and services to market more quickly.
“What we are trying to build is much more than a fund. We call it a digital health ecosystem,” he says. “Meaning it will bring not only funding but the knowledge and experience of the managing partners who have been successful entrepreneurs like myself, and the prospective partners with whom we already signed prospective collaborations — the first example is Johns Hopkins which will be a fast track beta site for the portfolio startups of the fund.”
“The idea is to be very hands on with the startups that join us,” he adds. “Healthcare is not like any other tech domain. Managing and finding your way inside the system is — not ‘can be’, but is — very complicated.
“Because of the complexity of the healthcare system the fact that OurCrowd is backed by almost now 16,000 investors — each and every one of them has his own expertise, his own positioning in the world that he lives in, and these investors are spread all over the world — from the US, the UK, to Germany, to Australia, to Hong Kong, to Singapore and so on… This network is not just a funding network it’s also a real world supporting network for startups.”
Qure is the second sector specific fund launched by OurCrowd. The first, launched in June, was an accelerator fund focused on agriculture technology — with a spokeswoman for the platform saying getting involved in sector funds is a new trend it’s seeing from its investors.
“We’re also looking at other areas to have sector funds — ranging from mobility and transportation, to machine learning, robotics and drones,” she adds.