March 13, 2014

eXXclaim is a new fund focused on investments in women’s health startups with medical device and mobile health solutions. Healthcare investor Dr. Anula Jayasuriya and medical device leader Karen Drexler had been talking about the problems of getting women’s health solutions funded for quite some time. Then it hit them: Schedules relatively open,  the investor community “relatively happier” than it’s been for several years with exits in healthIT, with combined experience in mentoring CEOs and leading companies and funds — create a fund to invest in an underfunded space.

But eXXclaim isn’t operating a charity. While some healthcare investors may joke about “bikini medicine” behind closed doors, they’ll miss the punchline. eXXclaim’s seizing on a huge market: Women make up the majority of the world population and, according to the U.S. Department of Labor, they also make 80 percent of a family’s healthcare decisions.

“This is not a political action fund. Primarily we want to make money and returns and build successful companies. And secondarily perhaps, we can help change some of the perceptions about investing in women’s health,” Jayasuriya said.

The focus is on companies that don’t need a ton of money, that can run lean — with “high capital efficiency,” — to provide a return. For instance, Jayasuriya said, an attractive device company would go the 510(k) route, and, according to Drexler, may need only a few hundred thousand or couple million dollars in investment to see returns.

That rules out pharma, but not many early-stage medtech and mobile health solutions. Drexler said two types of companies intrigue her: startups that require fairly modest investments to develop a product with a proof of concept and spin-outs backed with data and a “good story.”

The fund, incorporated in November 2013, has already invested in at least two promising women’s health startups:

  • Wildflower Health: Led by Leah Sparks, who negotiated Medco’s acquisition of DNA Direct, this healthcare startup uses mhealth to link Mom directly to the healthcare system. The company’s first product, DueDate Plus, uses payers to provide the cash to get moms engaging with the healthcare system early (often during the first 10 weeks of pregnancy). Future products will help moms make pediatric decisions, as navigated through her specific health plan.
  • Medable: Led by dermatologist-turned-CEO Dr. Michelle Longmire, this startup morphed from a teledermatology solutions tech to limit repeat visits (after diagnosis was made in person) to a care coordination platform. According to a MedCity News profile, that “platform encrypts patient information, secures it as it is transferred to the cloud and protects data at rest. In addition to the HIPAA compliance component, the platform is also designed to help app developers with care delivery, communication and data dashboards.”

While these companies are women-led, and Drexler said the fund is happy to support female CEOs, it’s not a requirement for funding. They will also consider startups with male CEOs that offer women’s health solutions.

eXXclaim will invest in companies in traditional women’s health spaces, such as startups with aims to up quality of life for the “leaky, creaky, saggy cohort,” those women who are aging but want to remain active well into their retirement, Jayasuriya said. But the fund defines “women’s health” broadly, and the startups it has funded so far think of women as healthcare’s target consumers, not just as patients. So, Jayasuriya said, they’re also potentially looking at pediatrics, and Drexler said they would also consider startups that consider a woman’s role in making decisions for aging parents, for example. It could include OTC products, as well, Jayasuriya said.

“(Jayasuriya) provides her portfolio companies tremendous time and support to ensure early success. Her focus on achieving market fit and early revenue have shaped our strong trajectory as a startup,” Longmire said in an e-mail.

Jayasuriya said eXXclaim is currently considering several startups in the labor and delivery space.

Read Jayasuriya’s take on what Cate Blanchett has to do with healthcare’s changing focus.

Read more about Medable here.

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