Venture firm Oak Investment Partners, which has made investments in health IT companies such as athenahealth and Castlight Health, is gearing up to announce a new series of allocations from a $500 million Oak HC/FT fund, which closed in June. Although the fund will invest in health IT and diagnostic tools as well as financial technology, it expects to invest in roughly 12 businesses with more funding allocated to healthcare than fintech.
Andrew Adams, a general partner at the firm, leads the investment team for the fund with Managing Partner Ann Lamont and General Partner Patricia Kemp. In an interview with MedCity News, Adams said the firm raised the fund because it saw “tremendous opportunity and tremendous convergence in healthcare.” It’s on the lookout for growth-stage, revenue-generating companies that have established a position in the market.
One area where it doesn’t have a presence is health IT companies focused on the dual eligibles market. As Adams sees it, the $300 billion market serving people eligible for Medicare and Medicaid suffers from fragmented delivery that states need to get under control. “We think there is plenty of opportunity there as well,” Adams said.
Among its investment priorities are companies with alternative care delivery models that want to improve the quality of the patient experience and contain costs. Improving the efficiency and accuracy of payments is another priority, illustrated by its investment in iHealth Technologies. Its investment in Castlight Health demonstrates its belief that the employer segment is one of most innovative segments of healthcare, based on the sheer need to preserve the bottom line. The cost shift in healthcare has also necessitated decision support tools to help providers make the choices they need for a fee-for-value model to work. One of the companies where Adams has a board seat is xG Health Solutions, a Geisinger Health System spinoff. Precision medicine through diagnostic tools is another priority.
Telemedicine figures into the mix as well, demonstrated by the firm’s previous investment in teleradiology company Radisphere.
