Google Ventures is making significant investments in Life Science companies -an indication of the explosive growth potential of this tech sector.
According to industry tracker, Dow Jones VentureSource, venture capital investment last quarter was the highest since the peak of the dotcom boom in 2000. Investors poured a total of $13.84 billion in the second quarter of 2014, more than half of which went to companies in San Francisco and Silicon Valley.
Given that the healthcare system in America is far from ideal, a crop of entrepreneurs have risen to the challenge, using technology to address some of the needs of the system. As a result, the last few years have seen a burst of startups related to healthcare. Skimble, a Rock Health incubator graduate that makes workout apps, has been profitable in just two years. Many entrepreneurs have also jumped on the personalized medicine bandwagon. An example is CancerIQ, which integrates genomic data and outcomes to accelerate personalized therapy in cancer.
Google Ventures, Google’s venture capital investment arm, has also invested in the life science and health care sector. In May this year, Google Ventures made its largest investment in the life science sector, leading a $130 million raise for Flatiron Health in its Series B venture capital round. Since its founding in 2009, Google Ventures has differentiated itself from the typical corporate fund by investing in a wide and quirky array of partners, and hiring early-stage investors, engineers, and ex-entrepreneurs, labeling itself a “radically different kind of venture fund” on Twitter. After months of speculation, Google recently announced a new venture fund for European entrepreneurs, with an initial funding of $100 million.
A Datafox plot of Google Venture’s 12 portfolio companies in the Life Science sector shows two companies in the top-left section of the Age vs Quality estimate graph, indicative of fast growing companies. Flatiron Health, founded in 2012, has a Datafox score of 81.82, while Foundation Medicine, founded in 2010, has an impressive Datafox score of 92.33. Amongst the myriad of health care startups, these are definitely two to watch.
Flatiron Health was founded in 2012 by the people who launched and sold Invite Media to Google, Zach Weinberg and Nat Turner. Flatiron Health is a startup that developed the industry’s first cancer database in real-time, the OncologyCloud™ platform. The goal is to collect data from electronic medical records from cancer cancers around the world, and consolidating it into usable information for physicians and life science researchers on their cloud-based platform. As mentioned, Flatiron Health received Google Venture’s largest investment in the life science sector. Part of the $130 million received will be used to acquire an electronic medical records company, Altos Solutions.
Interestingly, Foundation Medicine is also no stranger to big data analytics and personalized cancer care. Despite heavy regulations, Foundation Medicine’s products, the FoundationOne ® and FoundationOne Heme ®, have received final approval from the New York State Department of Health, allowing doctors to utilize their tests for the detection of genomic alterations, and match those alterations to selected therapies. The company which went public in September last year, had revenue of $11.45 million last quarter, up 120.2% compared to the same quarter in 2013.
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