Med tech VC HealthQuest aims for $175M new fund

HealthQuest Capital raised a $110 million med tech fund and spun out of Sofinnova Ventures last year. That kind of commitment is remarkable in a segment long stigmatized as offering poor returns and few exit opportunities. But now the firm has gone even further.

Garheng Kong, HealthQuest Managing Partner--Courtesy of HealthQuest

The firm is already raising a second fund that's slated to top the first at $175 million, according to a recent SEC filing. It's disclosed at least 7 investments from the first fund. Garheng Kong, who was previously with Sofinnova Ventures, heads HealthQuest.

The firm's investment interests are broad and entirely exclude therapeutics; they cover medical devices, diagnostics, digital health, consumer health and hospital care. It's focused on companies with revenue and considers itself a growth investor focused on commercialization; that's in contrast with Sofinnova, which is often early-stage focused. Sofinnova encompasses information technology and life science investment, with the latter focused on therapeutics.

HealthQuest defines its typical company investment as totaling roughly $7 million to $10 million, with an initial investment of about $2 million to $5 million. Its healthcare investment thesis hinges on improving value by lowering costs and improving outcomes, reducing complexity thereby potentially eliminating costs and mistakes and increasing certainty in order to offer better decision making and outcomes.

The firm's disclosed portfolio so far includes cancer molecular diagnostics company Castle Biosciences; disposable arthroscopy diagnostic device player Trice Medical; genetic testing company Lineagen; healthcare IT company VirMedica; wearable pathogen-protection player Vestagen; healthcare payments program inMediata; and consumer OTC drug company First Aid Shot Therapy.

- here is the SEC filing