Arguing that VC investment in telehealth is “ad hoc” new $75M teleheath-only fund launches

The pandemic has fueled the growing adoption of telehealth for primary care and specialty medicine alike. But despite a flurry of federal legislation and new state regulations vastly expanding coverage for virtual care, there’s been a paucity of capital dedicated to telehealth investment.

At least that’s what New York-based Swiftarc Ventures found in its 12-month exhaustive search of the space, said Sid Jawahar, its founder and managing partner in an interview. That led the early- and growth-stage venture capital firm to launch the “world’s first telehealth-focused venture fund” at $75 million, earlier this week. 

“Ad hoc” was the word Jawahar heard over and over to describe the investment effort into telehealth from successful entrepreneurs and behemoths in telehealth like Teladoc. “We heard repeatedly that there’s venture capital interest and activity but there really isn’t a dedicated effort, and that’s partly why they felt there hasn’t been an uptick in activity or innovation or disruption in the space,” he said. 

Jawahar’s perspective appears counter to trends in the marketplace favoring investment in telehealth. But he argues that much of the funding has been provided by general healthcare venture capitalists, with other disparate, tangential sources, like universities building on their existing technology or government funding focused on advancing basic primary care, also contributing.

By making that focused investment, Swiftarc’s telehealth venture fund aims to improve access to care and lower costs, including for low-income patients who have limited options. As it looks to reach underserved populations, the fund will focus initially on three areas: obesity care, including prevention of related conditions such as diabetes and hypertension; mental and behavioral health; and pediatrics.

More than one-third of adults in the U.S. are considered obese, and very few receive clinical treatment. Jawahar points out that while lifestyle is a part of the solution, clinical interventions may also necessary. Swiftarc supports a platform-based approach where dietitians, primary care physicians and other clinicians can communicate with patients and each other and have access to the same medical records.

Swiftarc Telehealth Fund’s first investment is being made in precision medicine startup Intellihealth to scale its work in obesity management. Early adopters of the technology include NewYork-Presbyterian and Massachusetts General Hospital. And Jawahar sees the platform as well-positioned to be adopted by hospitals systems across the country.

To help portfolio companies with more than just capital, the venture fund is leveraging its partnership with Nottingham Spirk, based in Cleveland, to form a telehealth commercialization partnership with the goal of speedy entry of innovative services into the market.

An investor and founder in the $75 million fund articulated his belief in the future of telemedicine and Swiftarc’s ability to capitalize on that growth.

“Recent increased use of telemedicine during the pandemic has delivered healthcare to those in need in a safe, convenient method,” said Dr. Paul Bedocs, a dermatologist and founding investor in the telehealth fund and inaugural member of the Swiftarc medical advisory, in the news release. “This increase in use has proven to all involved in the consumption and delivery of healthcare, that this method is a valuable tool that improves patient care and satisfaction.”

Photo: sdecoret, Getty Images