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HealthQuest Capital Raises $110M for Debut Fund with Medtech Focus

HealthQuest Capital, founded last year by Sofinnova Ventures partner Garheng Kong, says it has raised $110 million for its debut fund and already has invested in several medical technology and patient care products.

While HealthQuest is staying close to Sofinnova—sharing its Menlo Park, CA, office and back office resources—Kong says the firm has a different strategy.

Where Sofinnova has raised nearly $1 billion for its two most recent funds to invest mainly in biopharmaceuticals, HealthQuest set out to raise just $50 million for its first fund to invest in medical devices, diagnostics, health IT, mobile health, consumer over-the-counter products, and patient care products—especially where innovation can improve both patient care and healthcare costs. “Nowadays, innovation has to be cost-effective” as well as improve patient outcomes, Kong said, “so healthcare companies want to know how much cost you’re taking out of the system.”

The combination of team and strategy resonated with investors, Kong said, and he closed fund-raising at $110 million for HealthQuest’s inaugural fund. While there was some overlap with Sofinnova’s investors, he said HealthQuest’s limited partners are mostly different, and include pension plans, endowments, family offices, and individual investors. A HealthQuest spokeswoman declined to say whether Sofinnova itself has invested in the new fund, saying, “We aren’t providing any detail on underlying investors or economics.”

David Kabakoff, a San Diego-based partner with Sofinnova Ventures since 2007, will continue to play a role in both worlds. Kabakoff, who has had both operational and investment roles in the life sciences, will be making medtech investments for HealthQuest and placing bets on … Next Page »

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