Penn Medicine and the Wharton School launched a $5 million fund to invest in for-profit companies doing work to reduce health equities in Philadelphia.
The Fund for Health will invest the money over three years, with Penn taking a minority stake in the businesses it selects. A group of 16 students across several of Penn’s colleges will lead the Fund’s investment team to determine which businesses are selected for investment.
Eligible companies can be based in or outside of Philadelphia, but they are required to offer services, products or operations that “positively impact” city residents. A company can receive between $100,000 and $250,000 in seed funding from the Fund. The Fund may invest in up to 10 companies a year.
Three companies have already received a total of $750,000 from the Fund:
- RecoveryLink — a Philadelphia telehealth and electronic records platform designed to improve availability and delivery of recovery support services for people with substance use or mental health disorders.
- Kinvolved — a New York education software firm that develops platforms to reduce student absenteeism in schools.
- Uptrust — A San Francisco software firm that keeps people in the criminal justice system out of jail through court date and probation appointment reminders.
The ultimate goal of the Fund for Health is to improve the social determinants of health in Philadelphia, particularly for low-income and underserved communities. Nearly a quarter of the city’s residents live below the poverty line, and reducing disparities in the places where Philadelphians live, work, learn and play can impact health positively.
Penn isn’t seeking to have a financial return from its investments, said Rajith Sebastian, co-director of the fund and director of special projects and impact investing at the Wharton Social Impact Initiative. The Fund would rather invest in companies that can benefit the city while sustaining themselves.
“The whole thinking here is there is a role for capital in for-profit businesses that can allow them to do good in Philadelphia,” Sebastian said.
Penn is not only seeking companies in Philadelphia to participate in the fund, said Brandon Grant, co-director of the fund and strategic support manager in the office of Penn Medicine’s CEO. The goal is to also bring companies to Philadelphia, creating more job opportunities in the city.
The Fund is working with city government, community organizations, local accelerators and local startup incubators to line up potential companies to invest in. Penn recognizes that it won’t be able to reach all the companies that fit its criteria on its own, and Sebastian encourages businesses to reach out.
“We are open for business, and we are very keen to see what other businesses there are in Philadelphia that fit our investment thesis,” Sebastian said.
