In many ways, health tech accelerators are selling access — both to their partners and to the startups they select and who choose to participate. But when a health IT vendor with customer base is running an accelerator, it changes the dynamic and can offer an even more attractive proposition.
When cloud-based health IT vendor athenahealth launched its More Disruption Please accelerator in 2014, it was designed to provide a vehicle for startups interested in getting into the company’s service catalog marketplace, but which weren’t quite ready.
“We had so many companies that we wished we could work with more closely, but they were too early for the marketplace, even though they had great ideas,” Mandira Singh, director of the More Disruption Please program, said in a phone interview.
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“The goal of our whole program is to lower the barrier of entry for the best solutions to help us build the healthcare Internet,” she said.
In its first full year of the program in 2015, it added five companies to its portfolio and currently has eight.
“The biggest differentiator we offer is the value we are adding,” Singh said. “We provide access to our expertise and our client base. We are not relying on other entities to do that.”
She also noted that the companies it invests in already have a product and it isn’t looking for them to pivot.
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Health tech accelerators such as Blueprint Health, Healthbox, and Dreamit Health have shifted their models to become more flexible, equity-free or geographic agnostic or all of the above. athenahealth’s accelerator has no structured program, but works with each startup it accepts on a rolling basis to determine what their specific needs are. It also provides free workspace from offices in Watertown, Massachusetts, Austin and San Francisco. It, too, has made changes to its program, according to Singh.
It doesn’t regard these accelerators as competition. It views what it does as separate from these accelerators. complementing each other.
“We love other accelerators,” Singh said. “They do a great job of taking companies from the early stage and then we help them scale.”
Singh explains that when it first invests in a company, anywhere from $250,000 to $2 million, it works with each of them to chart what their milestones and goals will be since they’ll each be different.
“Of the eight investments we have completed to date, no two have been the same. At this stage we have led equity rounds, done convertible debt as well as joined rounds led by others where we adopt their terms. Our boilerplate continues to evolve as we work with more companies and as we see market terms change.”
Singh also acknowledged that the More Disruption Please accelerator has tweaked its approach as well. Last year, a MedCity News article highlighted terms for the accelerator.
“I think our thesis has evolved a lot. We initially invested in companies that we wanted to be on the marketplace. But it’s such an easy path to the marketplace now.” She said the company can make investments in startups accelerating its R&D roadmap.
“What one startup might need in terms of access to expertise might be totally different from what another needs,” Singh said. “We have driven client volume to products by helping [startups] streamline. We’re helping with internal strategy by helping companies add internal value.”
The marketplace currently has about 50 companies and pilots with another 17. Many of them are startups. That doesn’t include ICD-10 training, HIPAA compliance or Web design service providers.
One of its recent investments is Patient Pop. It added the practice management software business to the marketplace after it went through its accelerator. “We were the first electronic health record it chose to integrate with. It is helping practices acquire and retain patients.” It also invested in Patient.io in December.
Looking ahead, Singh declined to say how many companies it expects to invest in this year. “We don’t adhere to a set number of deals or a set amount of capital – since we invest off our balance sheet we have a lot of flexibility and will invest as we see compelling opportunities. That said, we made 3 investments in 2014 and 5 in 2015 – I expect we will keep our current pace but only if we see the right investments in the market.”
Still, it is currently seeking applications through April 1 for an innovation challenge which it describes as “a virtual hackathon,” for solutions to address hospitals’ pain points.
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