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SecondMarket eyes health tech opportunities with Startup Health deal

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SecondMarket investors used to buying secondary shares in traditional consumer Internet companies are getting a chance to expand their horizons.

As part of a broader plan to bring new opportunities to accredited investors on its site, the New York-based online trading platform is partnering with digital health academy Startup Health for the month of December to educate members about health tech and allow them to make primary investments in health tech companies as well as a new fund for Startup Health.

The companies themselves declined to share details on the investment opportunities but according to a document available to investors on SecondMarket, Startup Health is looking for funding for a $7.5 million Innovation Fund to support 100 digital health and wellness entrepreneurs enrolled in its accelerator-like startup academy. The new fund will own 2 to 10 percent equity in each company supported by it.

According to the document, the fund had its first close in June and the portfolio already includes 13 companies out of a goal of 100. But, with an ultimate mission of helping to build 1,000 sustainable health tech companies over ten years, the digital health program plans for subsequent funds to support hundreds additional investments. Since launching in June 2011, Startup Health has enrolled 23 startups in its three-year program, which targets companies that already have some funding and momentum and provides coaching, connections and other resources.

Through the partnership, Startup Health also helped inform SecondMarket content on the health tech sector, including an online investment guide, whitepaper, articles and an upcoming webinar. So far, according to SecondMarket, the response from investors has been very positive. Since the start of the month, the site said it has seen nearly $5 million in indications of interest from investors and one investment opportunity in a health tech company has already closed.

Until four months ago, SecondMarket said it only supported trading in secondary shares, but expanded into new asset classes in response to feedback from users on its site. In November, it launched a themed-month program to educate members about the different opportunities, with the first month focusing on film. Other themes could include wine, art, education and peer-to-peer loans. The company has previously enabled participants to invest in a range of asset classes.

Jeremy Smith, SecondMarket’s chief strategy officer, said they chose to partner with Startup Health because they believe in the investment opportunity in healthcare and support Startup Health’s approach that pairs funding with mentorship and coaching.

“We think there are a lot of compelling heath tech investments out there,” he said. “Health care this time around is being disrupted in a very real way.”

Image by JCD via Shutterstock.