Redesign Health, a company building other healthcare startups, tells londonbusinessblog.com it has raised $65 million in fresh capital as it continues its goal of creating dozens more startups over the next five years.
The round brings the company’s post-money valuation to $1.7 billion, according to a source with knowledge of the financing. (Redesign declined to comment on the rating.)
Founded in 2018 by CEO Brett ShaheenRedesign’s team of approximately 300 researches, assembles, labels and launches healthcare startups by leveraging its team of entrepreneurs, healthcare operators, business analysts and investors. While the company is often compared to a VC fund or accelerator, Redesign sets itself apart by not fitting in one box.
Redesign conducts research into healthcare sectors and identifies bottlenecks or areas that can benefit from innovation. It then prepares a dissertation and product development begins. From there, it launches a startup and assembles a leadership team.
The latest funding will benefit Redesign’s own operations and platform, rather than being distributed to the operating companies it founded.
To date, Redesign has launched more than 40 companies since its inception, including: Ever/body, which focuses on cosmetic dermatology; cancer care company Jasper; and metabolic health company to calibrate.
“We still have a long way to go, but through this process, we have developed a platform and process that we believe will fundamentally change the risk equation for innovation,” said Shaheen.
Redesign plans to establish more than 25 companies this year alone, Shaheen said. “We are consistently reinforced in our belief that healthcare requires innovation at scale, and we are faced with a desperate need for innovation that our model can play a role in.”
While venture capital investment in health technology peaked in 2021, broader macroeconomic concerns have led to a slowdown in deals, making Redesign’s Series C all the more remarkable.
Healthcare venture capital funding reached nearly $82 billion in 2021, according to data from Crunchbase, which also reports that the sector has raised just over $35 billion so far this year.
Funders behind the deal point out that healthcare is a field with even long-term promise amid warning signs of a downturn.
“If COVID has launched many trends, one of them has been an acceleration of elements of healthcare transformation that are important,” says Daryl Toli, which leads VC firm General Catalyst’s Health Assurance ecosystem. He adds: “It’s important to keep investing in great ideas, and we know [that] in healthcare, the good companies and the great ideas survive, they thrive and grow.”
Tol’s company led the recent financing round and as part of the deal Hemant Taneja, General Catalyst CEO and managing director, has joined Redesign’s board of directors. CVS Health Ventures and several others, including UPMC Enterprises, TriplePoint Capital and Samsung Next, also participated in the round.
“What I don’t think has fundamentally changed is the ability to bring innovation to bring much better consumer experiences – innovative adopted business models that align incentives and generate value,” Vijay PatelCVS Health Ventures partner and co-founder, tells londonbusinessblog.com.
In addition to investments, CVS Ventures, General Catalyst and UPMC Enterprises have entered into innovation agreements with Redesign Health, meaning the companies can use Redesign’s platform tools, technologies and insights to build and support dozens of companies.
“The shape of these relationships will evolve over time,” Shaheen says, “but we expect it to deliver dozens of new innovations and businesses in the coming years.”