With Epic Ties, HealthX Raises $20M First Fund, Reveals Investments
[Corrected 3/16/18 1:34 p.m. See below.] HealthX Ventures, a Madison, WI-based group that invests in early-stage healthcare technology companies, says that it has closed a $20 million fund. About 75 investors participated, says Dan Blake, a partner at the fund.
HealthX, which says it seeks to put money into startups that are getting their “first rounds of funding,” also disclosed the names of some of its portfolio companies.
Mark Bakken, founder and managing partner of HealthX Ventures, says the companies his group invests in are developing software that could lead to better and more affordable care.
“There are enormous opportunities for using technology to improve how healthcare is delivered and paid for,” Bakken, an Xconomist, says in a prepared statement. “Our fund supports companies solving hard problems that will not only lower the cost of healthcare, but also improve the lives of clinicians, patients, and their families.”
In 2014, Bakken began rounding up investors and sowing the seeds for what would become HealthX. That was around the time he stepped down from Nordic Consulting Partners, a Madison-based firm he founded in 2010 that has seen significant growth in the years since.
Nordic works on a number of projects involving installations of health records software developed by Epic Systems, which is headquartered southwest of Madison, in Verona, WI. Many of Nordic’s consultants are former Epic employees, as are a majority of HealthX’s five-person team.
There are additional connections between Epic and HealthX. One company the fund has invested in is Madison-based Redox, whose three co-founders all used to work at Epic. Redox has created digital tools that it says make it easier to get data into and out of healthcare organizations’ records systems.
Another Madison-based startup in the HealthX portfolio is EnsoData, which is using machine learning algorithms to help clinicians score sleep data. Bakken has also invested personally in Madison-based HealthMyne, whose software integrates medical imaging data and information from patients’ electronic health records, Blake says. [A previous version of this paragraph incorrectly stated that HealthMyne is one of the companies in HealthX Ventures’s investment portfolio. We regret the error.]
According to a news release, three companies outside of Wisconsin that HealthX has invested in are: Marina Del Ray, CA-based Moving Analytics; HealthiPASS, based in the Chicago area; and St. Louis-based Epharmix.
Bakken told the Wisconsin State Journal in 2014 that he was open to the possibility of having HealthX receive some of the money being allocated as part of the Badger Fund of Funds. That initiative involves passing a combination of public and private dollars down from a central “Badger Fund” to recipient funds, which in turn invest in startups.
However, none of the money HealthX raised for its first fund came from the Badger Fund, Blake says.
HealthX is “actively investing” out of its own fund, according to the release.
Frank Byrne, a senior executive advisor at HealthX who formerly served as president of St. Mary’s Hospital, in Madison, says software can help healthcare workers navigate the shifting landscape of that sector.
“Physicians, nurses, therapists, and other clinicians are experiencing enormous new pressures ranging from payment reform, changing regulations, and consumerism of healthcare,” Byrne says, in a prepared statement. “The industry is more and more accepting of technology tools that make the day-to-day lives of caregivers better, make their work more fulfilling, and improve their ability to meet the needs of the people they are dedicated to serving.”