Recognizing that its investments in innovation helped prepare it to respond to the Covid-19 pandemic, Froedtert & the Medical College of Wisconsin has stepped up its focus on investing in early-stage digital health companies through its innovation arm Inception Health.
The Wauwatosa-based organization has invested almost $14 million across a total of 15 deals since 2018 from a $15 million fund, Inception Health director Mike Maschek said, and three of those deals were announced within the last two months.
Inception Health's recent flurry of investment activity is strategic, Maschek said.
"We saw the impact of digital health and technology on our ability to respond to Covid and ... we want to continue to explore what else is out there from an innovative health care perspective," Maschek said.
Inception Health recently led a $1.75 million round for Boston-based Vincere Health, which offers a smoking cessation solution and is backed by other Wisconsin investors including The Equity League and American Family Insurance. Froedtert is signing a contract with Vincere to provide the solution for employees, Maschek said.
"We're always going back to, 'How do we solve real problems for our staff as well as our patient population?'" Maschek said. "Those are the types of companies that we want to invest in."
Inception Health also recently participated in a $17 million Series A round led by American Family Ventures for caregiver support solution provider TCARE Inc., which was founded in Milwaukee. TCARE participated in a gener8tor accelerator program in Madison and is now based in St. Louis.
In its third recent deal, Inception participated in a $2.85 million seed round for circadian rhythms technology company Arcascope, based in Chantilly, Virginia. Froedtert is in the process of implementing a pilot program of Arcascope's solution with its nurses, Maschek said.
Late last year, Inception Health also backed the first venture capital fund for Character Capital, a VC firm founded in Milwaukee by a former Google Ventures design partner.
Froedtert's recent investments come as the health system — like many others in the region and around the country — faces worsening financial challenges as wages have risen and revenue remains flat.
Froedtert launched Inception Health in 2015 as the hub of its partnerships and investments in digital health innovation. The organization currently has 54 full-time employees, with Maschek and his colleague Kelly Stevenson supporting its venture investing efforts.
While it initially launched as a digital health initiative, the pandemic has led Inception Heath to reposition its purpose moving forward given that digital health is becoming the norm.
"Seven years ago when we were building a digital platform, it was really sort of really progressive and new," Maschek said. "For us, it's continuing to stay focused on what is coming five to 10 years down the road."
