Peoria, Illinois-based OSF HealthCare was among the first U.S. health systems to establish a dedicated venture capital investment arm, along with Ascension, Kaiser Permanente and Providence. Since its founding in 2015, OSF Ventures has invested in 28 startups, nine of which have successfully exited.
Last week, the investment arm gained a new leader. Mayank Taneja became the health system’s vice president of investment, taking over for Stan Lynall, who founded and previously led OSF Ventures. In his new role, Taneja oversees $250 million in assets across three funds.
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Taneja has a deep medical background. He practiced internal medicine in India and worked in the post-market risk surveillance division at Zimmer Biomet before joining OSF in 2014. He began working on OSF’s usability services team to help startups pilot their technology and conduct clinical studies and later transitioned to OSF Ventures as one of the earliest members of its team in 2016.
The leadership change came five months after OSF’s board approved another $100 million fund for its venture capital arm. This fund is the third one allocated to OSF Ventures, following two $75 million funds that were approved in 2015 and 2019. Taneja said his team will continue to use this money to invest in startups specializing in medical devices, diagnostics and digital health. OSF Ventures typically invests about $2 million in each startup and reserves similarly-sized funds for follow-up investments should the company raise more money.
“The overarching theme is that we only invest in startups that are strategically valuable to the system,” he said.
At this moment, Taneja said OSF Ventures is focused on making investments in startups seeking to take care outside the four walls of a hospital through alternative care modalities such as telehealth or hospital-at-home. The venture fund ensures the startups it invests in offer a consolidated platform that captures the patient journey from start to finish and can roll multiple solutions into a single offering.
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“We’re trying to support the operational teams by seeing how we can do more with less in terms of our staffing and resources while still being able to deliver consistently,” he said.
The venture arm is also focusing its investments on startups specializing in workforce retention. OSF Ventures is looking at solutions designed to optimize staffing, improve workforce retention levels and help providers recruit staff from channels where they have not traditionally done outreach, according to Taneja.
To the startups it invests in, OSF is not only a financial growth partner but also a product and service development partner. When determining which startups its fund should go to, Taneja said his team only selects startups that offer products they could envision OSF successfully deploying. The health system has conducted clinical trials with its portfolio companies when they were working toward FDA approval, and has deployed or piloted the FDA-approved technologies its other portfolio companies offer. For example, OSF Ventures is collaborating with Epitel to help it commercialize its wireless, wearable brain wave-monitoring device to detect seizures.
To analyze potential portfolio companies, a vetting team meets every week to go over five or six startups. The multidisciplinary group includes clinicians, members of the IT team and members of OSF Ventures. When going over whether a company’s technology will serve the health system, the vetting team discusses whether the technology in question can be effectively implemented into OSF’s workflow and whether the startup can deliver evidence on its value proposition.
Taneja said his team will stick with this process because it has worked well for them so far. Nine of the 28 companies OSF Ventures has invested in have had successful exits, including Best Buy’s purchase of Current Health and Amwell’s acquisition of SilverCloud Health.
When OSF Ventures’ portfolio companies go public or get acquired, the revenue OSF receives always goes back to the treasury to further advance the health system’s mission, Taneja said.
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