East Coast venture capital firm sets sights on SaaS investments
An East Coast venture capital firm is making investments in companies that offer software as a service (SaaS) as a priority for the $249 million fund it just closed.
Among the four technology areas Edison Ventures is targeting are healthcare IT, interactive marketing and e-commerce, enterprise 2.0 and financial IT.
Software as a service limits the expenditure of customers since vendors host the application. Users don’t have the expense of maintaining and upgrading networks, computers and software applications, but access the software when needed. Companies pay the provider for the kind of services they use and how frequently they use it. A report by Accenture predicted that 2011 to 2013 will be a pivotal period for the development of the SaaS market and expected this model to become a mainstream offering from 2014 to 2016.
To date, Edison has invested in 29 healthcare IT businesses. In 2010, Edison invested $4 million in Premier Healthcare Exchange in New Jersey, a late-stage healthcare cost management company.
Edison invests up to $20 million for expansion, acquisitions and shareholder liquidity, according to its website. It is normally the lead and first institutional investor in its portfolio companies, according to its website.
Investment in healthcare IT rose 22 percent in 2011 over the previous year, according to a Dow Jones venture capital report, fueled in part by the national push to implement electronic health record requirements and the pressure to use digital solutions to cut medical bills. Healthcare IT collected $633 million for 86 deals in 2011, the report said. A National Venture Capital Association survey of its members revealed 61 percent believe investment in healthcare IT will continue to grow.