Octopus Ventures’ investment strategy includes ‘taboo’ healthcare startups

Subjects once deemed too sensitive to discuss have huge potential markets

With $1.3 billion in assets under management and a $280 million early-stage fund that closed in 2018, Octopus Ventures is carving out a niche for itself in healthcare investments in the U.S., the U.K. and Asia.

One of the key members of the Octopus team is Will Gibbs, an investor with the firm since 2013, who has been one of the architects of the firm’s “Future of Health” investment strategy.

Like many healthcare investors these days, Gibbs sees major opportunity sets for investors in the space that cut across a few different disciplines. Beyond that, there are a few specific categories where he and the team at Octopus are paying special attention.

For Gibbs, three areas of interest revolve around the increasing personalization and digitization of healthcare (with patients taking more control over their diagnoses and treatments); the mobilization of technology to address issues of antimicrobial resistance and the development of new treatments for humans and animals; and, finally, the application of artificial intelligence to the practice of healthcare.

We’ve broadened health to include animal health,” says Gibbs referring to opportunities around anti-microbial health and investments in animal health. In some instances, like the application of gene therapies to healthcare, opportunities in animal health are more near-term than consumer health, he says. It’s also where Gibbs believes that the anti-microbial tech will be felt first. 

These are all multi-billion dollar markets for companies that can successfully develop technologies to address the obstacles that patients, clinicians and healthcare systems are forced to overcome.

Within these thematic areas there’s another premise that undergirds how Gibbs and his colleagues are committing capital — what the firm calls “taboo” investment themes. It’s a label that Gibbs says his portfolio companies have embraced and it covers a range of healthcare subjects that were once deemed too sensitive to discuss but that have huge potential markets.

“Taboo areas are segments where there has been institutional bias around it, and where there have been low levels of innovation and high levels of demand,” says Gibbs.

Sadly, one segment of technology development in the healthcare industry that has remained taboo, according to Gibbs, is women’s health.

That’s an area where Octopus has already seen a significant amount of success for its nascent healthcare portfolio. The firm led the first big institutional investment round in Elvie, the women’s medical device technology developer behind a hands-free breast pump and a pelvic trainer and kegel exercise device.