Frist Cressey Ventures closed a $425 million fund, which it will use to invest in early-stage healthcare companies focused on bringing down costs and leveraging AI, the firm announced on Thursday.
The firm was founded by former U.S. Senate Majority Leader Bill Frist, MD, and Bryan Cressey. This is Frist Cressey Ventures’ fourth fund, bringing its total assets under management to almost $1 billion. It received support from strategic partners in the healthcare space, including Cigna Group Ventures, MedStar Health and OhioHealth.
Similar to previous funds, this fund will focus on financing companies that advance care delivery for patients and improve access and affordability, according to Partner Olivia Capra. However, it will lean more heavily into the technology that supports those goals, particularly AI that can streamline payment and risk models, improve coordination and automate care delivery in primary, specialty and mental health settings.
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“I think it will be the same focus. Our mission is not going to change, but I think we will see a lot more technology underpinning how the mission is executed and delivered,” Capra said in an interview.
Specifically, Frist Cressey Ventures will be looking to fund companies that address the aging population, which is rapidly growing, Capra added. There’s a need to improve medication management, access to treatments and cost of care for older adults. For example, one of the first investments in the fourth fund is in Aradigm, a benefits platform for cell and gene therapies.
“The company is really creating a benefit where there hasn’t ever been a benefit structure before for life-saving treatments in the cell and gene therapy space,” Capra said.
When it comes to companies that the firm is looking to steer away from, Capra said that it’s becoming more challenging for employer-focused, condition-specific point solutions. This comes as employers are dealing with significant cost pressures.
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“I think no longer can you just be an employer benefit for X disease,” she stated. “I think that the single point solutions will no longer survive, especially in the commercial market. I think employers are going to be thinking on a bigger scale, around less disease state-specific and more, how do consumers engage with their health from the get-go, and then, how do I steer them to the right points along the way?”
Meanwhile, alternative health plans for employers (like Surest) may become a hotter segment for investors, she noted.
In its previous funds, Frist Cressey Ventures has had 44 total investments and 14 exits. Some of its companies include Ambience Healthcare, Thyme Care, Qualified Health and Monogram Health.
Frist Cressey Ventures also announced that it is launching the fifth class of its FCV Collective, a curated group of 16 healthcare executives collaborating throughout the year to drive durable change and engage directly with policymakers in Washington, D.C.
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