VC 7wireVentures Closes New $150 Million Fund for Healthcare Startup Companies

By Luigi Wewege Tuesday, May 18, 2021

7wire Ventures, a venture capital (VC) fund founded by Glen Tullman and Lee Shapiro, announced it is launching a new $150 million fund for healthcare startup companies. This marks the second healthcare VC fund for the investing company. Three years ago, the VC business closed its first fund after raising $100 million.

Doctor working on a laptop next to a stethoscope.

Focus Narrowed to Healthcare Business Industry

Business partners that backed a new healthcare fund include insurance companies and large employers such as Boeing, Cigna, Blue Cross Blue Shield of Florida, Humana and Rush Medical. Additionally, the VC fund has also welcomed new partners Robert Garber and Alyssa Jaffee and operating partner David Schonthal.

Transcarent, the consumer-directed healthcare startup company for employees of self-insured employers founded by Tullman, was one of the first startups to receive a business investment from the VC fund. The healthcare investing business also backed a navigation and care startup company focused on cancer treatments, Jasper Health.

“7wireVentures is proud that many of the companies we’ve hatched or were early investors in played a key role in getting us through the pandemic. Now, we have the opportunity to make more progress in taking health and care to the next level,” said Glen Tullman, a managing partner at the company.

A new fund comes a year after the VC fund witnessed Teladoc Health acquiring the chronic disease management company Livongo — also founded by Tullman in 2008 —- for $18.5 billion.

General Catalyst managing partner Hemant Taneja and Tullman are also co-sponsors of a $500 million special purpose acquisition company (SPAC), created to help health insurance companies go public. On the other hand, Shapiro is a co-sponsor of another $360 million SPAC focused on the senior care sector.

The pair founded 7wire in 2013, and back then, the VC fund was focused on multiple sectors, including energy and education. However, as time went by, 7wire was increasingly lured by healthcare, mostly because of the ability to impact people’s lives and the sector’s size.

“We envision a future in which consumers are provided with the tools, technology, and information needed to make smart health decisions much as they do in other facets of their life. The new fund will enable us to support superior companies and build towards that future,” said Robert Garber, a partner at 7wireVentures.

In the beginning, the VC fund was creating special purpose investment vehicles to invest capital from family funds and rich individuals; however, in 2016, the duo started their first healthcare fund in a bid to raise capital from institutional investors, including health insurers and hospitals.

Shapiro and Tullman also decided to invest all of their Livongo holdings into the fund, about which Shapiro says it “may have been the largest financial mistake ever made” for them personally. However, they are huge admirers of investing in early-stage healthcare startup companies that have huge potential to grow.

“We love the process of building teams and building businesses, generally using technology to try to make things better,” adds Tullman.

The net internal rate of return of its first VC fund stands at 70% with 14 startup companies currently in their business portfolio.

Summary

7wire, the VC fund behind Livongo company, announced it is launching its second fund of $150 million to back healthcare startup companies. The first investments of 7wire’s new fund include healthcare startup Transcarent and the cancer diagnosis-focused navigation and care company Jasper Health.

About the Author


Headshot for author Luigi Wewege

Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.

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