Device investment firm gets support from Medtronic, Abbott

Rainbow Medical is seeking $50 million to expand its investment in medical device startups, and the Israeli firm has already secured support from Medtronic ($MDT) and Abbott Laboratories ($ABT), Globes reports.

The company didn't disclose the size of the investments from the two giants, but if Rainbow can secure this $50 million round, it will likely be able to operate off of its seed companies' dividends from here on out, CEO Efi Cohen-Arazi told Globes.

Rainbow, founded by entrepreneur Yossi Gross, already has 12 portfolio companies, investing between $3 million and $5 million in each to get devices to the human clinical trial phase. Rainbow is looking to reach 15 seed firms with the financing round. The company's method is a bit different from a traditional venture capital: Rainbow licenses its own intellectual property to the firms it seeds, allowing it to maintain majority holding and steer each company's development.

"We're not exactly a venture capital fund, but an operative-investment company that establishes companies on the basis of our patents, a model that exists nowhere else in the world," Cohen-Arazi told ​Globes.

And, so far, it has been successful. Since Rainbow's founding in 2007, 8 of its 12 companies have reached the clinical trial phase of development, and one already has a CE mark. Among those companies are Vascular Dynamics, which is developing a hypertension stent; Nano-Retina, at work on an artificial retinal prosthesis; and GluSense, a company developing an implantable continuous glucose sensor.

- read the Globes report

Suggested Articles

The clinical testing giant LabCorp will now begin rolling out a blood test for lung cancer developed by Resolution Bioscience.

Cognoa aims to equip pediatricians with an AI-powered app that can spot the signs of autism, allowing them to diagnose in the doctor's office.

Longitude Capital invests in what its founders call “transformative healthcare companies," working in areas they hope will increase quality of life.