Inova Center for Personalized Health Identifies Unique Advantage for Local Health Tech Entrepreneurs
In June, the Inova Personalized Health Accelerator (IPHA) released its first Health Tech Early-Stage Funding Snapshot. The report, designed to fill the data gap on the health technology industry, provided quarterly analysis and much needed insight on the funding of fledgling health tech companies. In a departure from favorable CrunchBase analysis on global venture deal and dollar volumes, our findings revealed U.S. early-stage health technology investment is contracting. That is, health tech investors seem to be favoring larger and later rounds while seed investors are sitting on the sidelines. As a result, early-stage investing in health technology is getting squeezed.
What does this mean for the Washington, D.C. health tech market? Enter the region’s entrepreneur advantage.
Startups in the D.C.-region are better than most at weathering difficult funding environments. In our region, startups know how to leverage the myriad resources available to obtain non-dilutive funding from government research and development budgets. And, given the near ubiquity of government contracting and consulting businesses in this region, most entrepreneurs are adept at delivering consulting revenue in order to keep the lights on.
It wasn’t a coincidence when, in 2016, Pitchbook ranked the Washington, D.C. area as the number one capital efficient region — generating an average Multiple on Invested Capital that is 34 percent higher than that of Silicon Valley and 45 percent higher than that of Boston for all exits.
Given D.C.’s capital efficiency, we think limited partners should take note. In the meantime, our accelerator is determined to provide local health tech entrepreneurs with the information and support they need to succeed, even in this tight funding environment.
The Snapshot is the latest of several initiatives designed to do just that. Since our inception, IPHA has held the promise of “enhancing patient care, better predicting and preventing disease, lowering costs and improving health outcomes” by driving the development of personalized health innovations. Startups such as HeMemics Biotechnologies, KinometriXand CoverMyTest now fall under the IPHA portfolio and offerings like our Entrepreneur Education Program and the 2018 Inova Discovery Series drive the discussion and growth of health tech in the region.
With a growing portfolio, expanded educational programs and increasing backlog of quality early-stage tech deals waiting to be funded, the future seems bright and makes us increasingly confident that we are on the right track to create a center of mass of health technology innovation here at Inova.