Providence Ventures Closes on Second $150M Health Care Fund
Seattle, Wash. and Renton, Wash.—Providence Ventures, the Venture capital arm of Providence St. Joseph Health (PSJH), the nation’s third largest health system, announced today a second $150 million health care venture capital and growth equity fund.
Providence Ventures II will target early and growth-stage health care companies that specialize in health care information technology, technology-enabled services, medical devices, and health care services. The fund will also invest $5 to $15 million per Portfolio Company with flexibility to lead investment rounds or participate as a syndicate partner.
“In health care, it’s easy to say you want to be innovative. But, innovation will fall to the backburner if you don’t find the best opportunities and fund them,” said Rod Hochman, M.D. president and CEO, Providence St. Joseph Health. “Through Providence Ventures, we have made a commitment to innovation by investing in and partnering with new companies that can help us find solutions to everyday challenges in health care. We’re excited to build upon our existing partnerships, as well as establish new ones that can help us advance our vision of health for a better world.”
“Providence Ventures’ investment model is to find and invest in companies that create needle-moving opportunities that address top priorities for PSJH,” said Aaron Martin, Providence Ventures’ Managing General Partner, who also serves as Providence St. Joseph Executive Vice President and Chief Digital Innovation Officer. “We partner closely with teams at PSJH and our portfolio companies to iterate, test, and scale their solutions at PSJH and other partner health systems. As evidence of the success of this model, all fifteen of our portfolio companies have commercial agreements with us, including several which have expanded enterprise-wide since our initial investment.”
Track record of success
To date, Providence Ventures has invested in fifteen portfolio companies and co-invested with over twenty-five leading health care venture capital firms since its creation in 2014. Providence Ventures manages an aggregate $300 million to fund innovative health care companies with solutions that make an impact on health outcomes, lowering costs and enhancing patient experience.
“Since making their initial investment in 2015, the Providence Ventures team has consistently delivered on their mission to enhance our company’s value,” said Graham Gardner, CEO of Kyruus, the leading patient access solution in the healthcare industry. “Providence Ventures and the PSJH clinical and operations teams partnered with us early on to help optimize our solution and deploy it across the system. After we were able to demonstrate a meaningful ROI to PSJH, Providence Ventures made valuable introductions to other health systems in their network looking for a better patient-provider matching solution - leading to several large contracts that helped drive our early growth.”
Mike McSherry, the CEO and co-founder of Xealth, which was incubated at PSJH, said: “Without the partnership and deep engagement by the Providence Ventures’ team and PSJH’s executive and clinical leaders, the creation and early commercial expansion of Xealth would not have been possible. Providence Ventures’ unique model of facilitating strong relationships between its portfolio companies and PSJH’s key stakeholders to solve big problems enabled Xealth to develop its technology platform from the ground-up quickly with a detailed understanding of our health system customers’ needs and requirements.“
The Providence Ventures team keeps growing and plans to hire in 2019
The investment team is based in Seattle, Wash., with an additional office in Silicon Valley. Recently the team leadership has expanded to include David Kereiakes, Partner, and Rich Proscia, Senior Associate. Kereiakes is an experienced health care investor who most recently joined Providence Ventures from River Cities Capital Funds. Proscia joined the team from CVS, and prior to that Athenahealth, where he worked on venture investment initiatives.
The Providence Venture team includes:
- Aaron Martin, Managing General Partner
- Jeff Stolte, Senior Partner
- Dan Galles, Partner
- David Kereiakes, Partner
- Cyril Philip, Principal
- Rich Proscia, Senior Associate
The team will be expanding further with additional hires planned in early 2019. Interested companies, investors, and entrepreneurs can visit ProvidenceVentures.org for more information.
About Providence Ventures
Providence Ventures, founded in 2014, manages $300 million in venture capital funds on behalf of Providence St. Joseph Health (PSJH), one of the largest integrated health systems in the US. Providence Ventures’ mission is to achieve venture and growth equity class returns through direct investments in innovative healthcare companies that improve health outcomes, lower costs, and enhance the experience of our patients and caregivers. Providence Ventures offers investment capital, combined with health system expertise, to companies addressing existing and emerging pain points in healthcare. Providence Ventures partners with our portfolio companies to refine existing solutions, while expanding their adoption within and beyond our health system. To learn more, visit www.ProvidenceVentures.org.
About Providence St. Joseph Health
Providence St. Joseph Health is a national, not-for-profit Catholic health system comprising a diverse family of organizations and driven by a belief that health is a human right. With 51 hospitals, 829 physician clinics, senior services, supportive housing and many other health and educational services, the health system and its partners employ more than 119,000 caregivers serving communities across seven states – Alaska, California, Montana, New Mexico, Oregon, Texas and Washington, with system offices based in Renton, Washington and Irvine, California.
About Kyruus
Kyruus delivers industry-defining provider search and scheduling solutions that help health systems match patients with the right providers across their enterprise-wide access points. Serving 150,000 providers across leading health systems nationwide, the ProviderMatch suite of solutions—for consumers, access centers, and referral networks—enables a modern and consistent patient experience, while optimizing provider utilization. The company’s award-winning provider data management platform powers each of the ProviderMatch solutions and transforms how health systems understand and manage their provider networks. To find out why a Better Match Means Better Care, visit www.kyruus.com.
About Xealth
Xealth enables healthcare teams to order digital content and services as easily as they do medications today. Patients can then access these digital health prescriptions from the provider's portal, so that they can actively manage their health. Based in Seattle, the company was founded by the team of serial entrepreneurs behind Swype, the innovative keyboard that shipped on over one billion phones, and Boost Mobile, now Sprint's prepaid mobile service generating over $5 billion in revenue. Using the Xealth platform, care teams and physicians can monitor patient engagement and analyze the effects of more engaged patients.