Health IT, Startups

Q&A with Casper de Clercq of Norwest Venture Partners

Norwest Venture Partners General Partner Casper de Clercq says inexperienced digital health investors better buckle up: 2016 is going to be a bumpy ride.

imageFollowing news that Norwest Venture Partners had closed its 13th fund, its third at the $1.2 billion mark, I reached out to the investment firm to get some insights on its healthcare strategy in 2016. General Partner Casper de Clercq responded to my emailed questions.

Although Norwest favors investments in growth-stage companies, has it invested in Series A-stage companies in digital health?

Casper de Clerq: Yes, we have invested in Series A companies in the wearables space (Basis and Misfit), and will soon be announcing another Series A investment in the healthcare analytics space. We have a number of investments that we have made at the Series B and Series C stages in digital health including iRhythm, Telcare, and Crossover Health.

What’s your outlook on healthcare startups in 2016?

CdC: We are very enthusiastic about the upcoming year. We will be looking for clinical outcomes that are meaningful to consumers, patients and the healthcare system. We expect that healthcare consumers and payers will increasingly demand improved outcomes in much the same way they do for innovative medical devices and pharmaceuticals. The flurry of activity from incubators and from inexperienced investors will begin to settle down and lead to more reasonable valuations in digital health.

Do you see any emerging opportunities or expect to invest in any subsectors of health tech that you have not invested in before?

CdC: We see big opportunities in certain novel care models like telemedicine and on-demand (face-to-face) healthcare. We also see unique opportunities in behavioral health and in helping hospitals and patients manage high deductible plans.

Some say it will be a cautious, quiet year for digital health companies. What do you think?

CdC: We don’t believe this year will be quiet. We expect to see a shakeout of unsustainable digital health businesses and inexperienced investors as the focus shifts to clinical outcomes. Digital health has great potential and demonstrable exits, but the skills and patience required frequently does not fit the mindset of a typical tech investor. We expect valuations to come down to more reasonable levels which will reduce the likelihood of unnatural financings in the future.

 

Photo: Flickr

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