Venture-capital firm Kleiner Perkins Caufield & Byers will be teaming up with the incubator program Rock Health to sponsor digital health startups trying to disrupt the health care industry. The tandem announced Tuesday that they are increasing the cash delivered to individual startups in the program to $100,000.
Kleiner’s investment comes as overall investment in the healthcare sphere increases, with the impact of cloud and tablet technology making its mark in a traditionally more staid field. In June, a study by Rock Health found that investors had already poured $675 million into healthcare companies receiving $2 million or more in investments, compared with $968 million for similar companies the previous year. And according to financial services firm Burrill & Company, digital health financing climbed 317 percent in the first half of 2012.
Over the past two years, Rock Health has supported 35 digital health start-ups in San Francisco and Boston, the company noted, and before the current partnership with Kleiner Perkins, provided startups with $20,000 in funding through relationships with Mohr Davidow Ventures, Aberdare Ventures and the Mayo Clinic. Now, with the support of Kleiner Perkins in addition to the existing partners, startups will receive five times that amount in funding.
“We’re jumping into it and we’re very very excited about the area,” said Beth Seidenberg, a Kleiner Perkins partner in the group’s life sciences practice. Seidenberg said that healthcare has been a traditionally difficult market for entrepreneurs to break into, but the advent of cloud computing and new data-centric mobile devices have presented new opportunities in an area that was previously more dominated by security and regulation concerns.
“Now it’s time to really push that into the healthcare arena,” she said. “It’s the perfect storm that’s happening now.”
Halle Tecco, CEO and co-founder of Rock Health, said ever since the accelerator debuted recently, she’s seen remarkable growth in the arena, and the company had already been working closely with Kleiner partner Michael Abbott, who served as an advisor to the program.
“In this very short time, digital health has become a very popular space that entrepreneurs are starting to look at, and it’s exciting,” Tecco said. “Healthcare has done a really good job of being very siloed and had a culture of naysayers, and while tech has also traditionally been siloed too, it’s also been a culture where it’s okay to fail, so bringing these two together has been really exciting.”
Applications for the next Rock Health class of entrepreneurs open August 28 and close September 16.