Now, the company has already started making its first bets.
Healthier Capital announced its first two healthcare investments this month. The investment comes from co-leading his $21 million round for AI-powered medical imaging startup Ezra and backing behavioral health company Octave. Rubin told Business Insider earlier this month that the company plans to close on a third investment, which has not yet been announced.
This is Rubin's first foray into healthcare investing after years of executive roles at major companies such as UnitedHealth Group and Stanford Healthcare. Rubin declined to say how much money his venture fund has raised so far or where that money came from.
He told Business Insider that his goal is to support startups that improve patient outcomes, ideally while reducing costs for other healthcare professionals.
“The common thread here is partnering with technology-enabled healthcare innovators to drive healthier outcomes for everyone,” he said. “And we need to think not only about how we delight the consumer, but also about alignment on the payer, clinician, and care sides. We're excited about these solutions that can address multiple needs.”
Rubin left One Medical less than a year after Amazon completed its $3.9 billion acquisition. This year has been a turbulent year for One Medical. Business Insider reported earlier this month that Amazon has instituted several cost-cutting measures, including layoffs and planned office closures, as the company continues to report hundreds of millions of dollars in operating losses.
As Rubin looks for more startups to back, Healthy Capital's CEO listed five things he looks for in new investments.
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Product-market fit
First and foremost, Rubin said, he's looking for startups with market traction to sell their products and services.
These startups have often been in operation for several years and have proven demand for what they're selling.
Rubin said he wants to support startups that are beneficial to multiple stakeholders in the healthcare market. He said that's part of what drew him to invest in Ezra. Ezra uses AI-powered medical imaging to help screen patients for cancer earlier, reducing costs for imaging centers and ultimately for payers by finding problem conditions faster. We aim to reduce this.
“I don't like zero-sum games. For example, consumers like it, but employers and payers don't like it,” he said.
Ezra, one of Healthier Capital's first investments, uses AI to clean up MRI scans and speed up imaging.
Ezra
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realistic financial model
Rubin said he sees a large number of companies founded according to idealistic financial models and wants to work with founders with proven revenue strategies.
“There are a lot of companies that think if the world behaved this way, we would have a successful economic model,” Rubin said.
Startups without stable sources of income, such as employer contracts or insurance reimbursements, may have a harder time getting Rubin's support.
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Execution matters
Rubin said a good idea can only propel a startup forward so far.
“There are a lot of interesting ideas. The question is whether they can be executed at scale and have consistent performance,” he said.
How effectively startups can realize these ideas will depend on solid leadership, Rubin said. He added that startups need to establish distribution channels to sell their products and services to gain attention.
Octave CEO Sandeep Acharya (left) and Head of Clinical Care Golee Abrishami. Healthier Capital announced its investment in Octave in February.
octave
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need cash
As the healthcare financing market begins to recover from nearly two years of stagnation, it's important to understand how much cash startups are looking for in that environment and how startups will ultimately be able to scale operations. Rubin said they are thinking through how much capital they expect to need.
It can take years to become profitable as a healthcare startup. Some healthcare startups never reach profitability. Rubin carefully considers these risks and how startups plan to effectively utilize the venture capital provided to them, whether they rely on physical clinics or offer their services online. He said he was doing it.
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Superior patient outcomes and benefits
Rubin said startups in Healthier Capital's portfolio should aim to significantly improve patient outcomes while boasting significant investment return potential.
He said he sees its potential in various areas of healthcare, including specialty care, value-based care and clinical workflow automation software.
