Health Incubator Boom Driven by Demand, Says Healthbox’s Jenna Rose
Startup incubators have been multiplying so fast there’s talk of a bubble, and there’s no sign of slowdown anytime soon. Jenna Rose says the growth is justified and has come from both entrepreneur and investor demand.
You could say that she’s biased, given that she’s the director of Healthbox, a Chicago-founded health startup accelerator that announced earlier this spring that it’d be expanding to Boston. But it looks like there’s data to support the claim. San Francisco-founded Rock Health, the grant-giving healthcare accelerator that also brought its program to Boston this year, published a report last month showing that by June, investments in digital health startups during 2012 had hit $675 million, a 73 percent jump from the funding raised in the first six months of 2011.
Healthbox held its deadline for applications for its inaugural Boston class late last month, and will kick off its program on August 13. The program offers teams a $50,000 investment in exchange for 7 percent of their equity. It’s an offshoot of Chicago-based Sandbox Industries, a venture capital firm that manages funds on behalf of a few Blue Cross Blue Shield health plans, says Rose.
Sandbox also houses a so-called Startup Foundry arm that incubates entrepreneurs as they are developing and refining new business ideas, and an arm that supports innovation externally. To this end Sandbox is a co-founder of the tech incubator Excelerate Labs, alongside Healthbox. It has enlisted other partners for the Healthbox incubator such as Ascension Health, HLM Ventures, and Walgreens, and will also be launching a Healthbox edition in London later this year.
We’ll have to wait around until the Boston program begins to find out which startups made the cut, but read below highlights from my conversation with Rose to find out more about what Healthbox is looking for, how just collecting data isn’t enough, and why Boston (or anywhere, really) needs another incubator.
Xconomy: What brings Healthbox to Boston?
Jenna Rose: It has an extremely vibrant entrepreneur scene, with supporting institutions that really believe in startups. We’re tapping into those groups and universities and the really well-established investor community. From the healthcare perspective, it is similarly strong, with some of the most world-renowned and leading edge healthcare and provider systems. And there’s an ecosystem of progressive healthcare laws. It’s a great environment to be part of.
X: What types of startups are you looking for?
JR: We really try to cast a wide net for applicants. Our biggest requirement is a company must be poised for growth. Does the entrepreneur have a great idea but is open and eager for mentor feedback, and can they continue to improve on the value proposition? We’re especially encouraging entrepreneurs from the Northeast to apply. We tend not to accept life science and medical device startups; they’re very difficult to accelerate within three-month time frames, due to high regulatory burdens. Other than that we do keep an open mind.
X: What are some trends you are seeing among healthcare startups applying to the program?
JR: We really do try to focus on the industry’s big problems. Analytics is definitely a theme among applications. What we look for in analytics and informatics is making the data meaningful. There’s a lot of data out there being collected, but what we really need ideally is to know how that’s going to be used to make healthcare more efficient, more effective, and more affordable.
That could be unique ways to help engage patients and consumers. Healthcare has a huge stakeholder network: consumers, providers, health plans, government. We look for companies that look for ways to engage those different groups, through things like health and wellness, care coordination, disease management, and provider effectiveness solutions.
X: What sets Healthbox apart in the sea of incubators, particularly in healthcare?
JR: This is something we think about a lot. It’s true there have been a lot of new accelerators that have come into the tech space and health space in the last few years. But it shows there really is a demand out there for support for innovation—on the part of entrepreneurs, and mentors and investors who want greater access to these early stage startups. The biggest takeaway I get from this trend is a need. I think over the next couple of years we will see the accelerator model evolve as we learn to support that need. And we really try to be industry centric. We’re looking to solve the biggest problems in the industry. We’re trying to bring together people who have deep experience across the spectrum of healthcare—leaders, hospitals, health plan providers, physician groups—so entrepreneurs are getting broad insights, not just one perspective.