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Creating the next generation: our investment in Initiate Studios

Initiate creates companies that scale healthcare.

Initiate Studios is a company creation studio that incubates companies that democratize healthcare. They recognize that the building blocks of next-generation companies are: 1) smart data collection and analysis, 2) personalized and accessible treatments, and 3) consumerization.

Initiate Studios: a Healthy Ventures extender

Initiate Studios will act as an “extender” for Healthy Ventures. Over the past few years, we’ve recognized many spaces where winning companies ought to exist, but don’t. A studio model works with heavy investment in shared infrastructure across companies and a slower targeted cadence for company creation. HV is better served by keeping a broader aperture to scour best-in-class candidates across a wider universe of players. Investing in Initiate allows us to secure initial ownership of several companies in select, overlapping focus areas with an inside-track optionality to lead the additional financing of these companies.

Most Initiate companies will also follow Healthy Ventures’s playbook:

  • Targets businesses that have excess profits to pay for products at high margins, e.g., life-sciences 
  • Focuses on B2B software leveraging programmatic inside sales processes, so can be capital-efficient from the beginning
  • Initial product business collects data & penetrates the market, enabling them to obtain an unfair advantage in building out other second-order business opportunities.
  • Positive unit economics

We invested $1 million and have secured pro-rata rights in the companies' future financings. We expect that Initiate will spin-out 10-12 companies over the next 4-5 years.

Companies created by these founders have historically both gone public and exited via M&A. Given that Healthy Ventures will directly receive stock in the companies created (versus having a stake indirectly via ownership of Initiate itself), we will have the flexibility to wait until a traditional exit or to exit the companies via a secondary offering if the companies pursue a long-term IPO path.

Initiate is led by a team who has done this before.

Healthy Ventures has a long history with the principals of Initiate. They are visionaries, zero-to-one company builders, and veteran healthcare investors and operators.

One of the principals, Iana Dimkova has been a venture partner with Healthy Ventures since January 2020. Anya has known Randy Scott since 2010 when she was the sole institutional investor in his (now public) company, Invitae. Rowan Chapman has created many companies that Healthy Ventures have evaluated for investment. Jessica Owens is a former investor at Kleiner Perkins who has co-founded multiple companies, including GRAIL.

Prior to Initiate, Rowan and Iana worked together at GE Ventures in a very similar company creation model where they created and spun-out companies like Evidation Health (real-world clinical trials) and Vineti (specialty distribution for gene- and cell-based therapeutics).

Between them, the Initiate team has created 10 companies resulting in 6 IPOs and 4 acquisitions and created more than $30B in market capitalization.

Initiate’s innovative model will spin out 2-3 companies per year.

Initiate Studios is designed to create 2-3 companies each year. After recruiting a management team getting initial market traction, the companies will be spun out in conjunction with an externally-led round. In addition to directly receiving founders stock in each company, Healthy Ventures will have pro-rata investment rights in the companies’ future financings. We also expect Healthy Ventures will want to lead the Seed rounds of several of Initiate’s companies.

Companies created by these founders have historically both gone public and exited via M&A. Given that Healthy Ventures will directly receive stock in the companies created (versus having a stake indirectly via ownership in Initiate itself), we will be able to exit the companies via a secondary offering if the companies pursue a long-term IPO path.

Initiate is already working on several concepts for new companies including (i) a platform that uses real world evidence to improve clinical trial patient selection and enrollment and (ii) a new pharmacy distribution concept for specialty and generic medications.

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