Milestone Venture Partners said it plans to raise $150 million to fund early-stage companies focused on the growing field of digital health, which includes medical software and new health-related technologies.
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| Todd Pietri |
This will be the fifth fund for Milestone, which was founded in 1999 and has previously invested in healthcare software and services companies like Octagon Research Solutions, CareGain and Premise. The firm plans to hold a first closing by the end of the first half of 2015, Todd Pietri, Milestone's managing partner, told the Wall Street Journal, and will likely back 15 to 20 companies.
There's been little doubt the digital health market has been booming this year. According to Rock Health, a digital health incubator, venture funding in the sector touched $2.3 billion in the first half of 2014, which was $2 billion more than was invested the previous year.
With this fund, Pietri said, Milestone is looking to fill a niche by leading financings for companies in the early stages of product launch and revenue generation.
In the past, the firm backed 17 digital-health startups and exited 8 of them. Those companies include Medidata Solutions, which provides cloud-based software for clinical trials, and MapMyFitness, a mobile fitness device maker that was bought by sports garment-maker Under Armour in 2013.
Though the fund has a limited partner base of wealthy families, Pietri told the WSJ it may opt to raise an additional $20 million for the fund through limited partnerships (LPs). In its previous fund, the firm brought in LPs.
With the focus of the fifth fund concentrated on digital health, Milestone's pitch to investors will be simpler and could lure new strategic investors like health plans, health systems and drug manufacturers looking to cash in on the new health and fitness technologies that are being developed. For example, Health Enterprise Partners closed its new fund at $148.5 million in June with the support of investors like Cigna and the Cleveland Clinic.
- see the WSJ story