Over the past decade, large health systems such as Mayo Clinic, Permanent Kaiser and Ascent launched in-house investment funds to help healthcare startups transform care delivery. penn medicine joined the party last August when he launched the Penn Medicine-Wharton Health Fund in collaboration with the Wharton Social Impact Initiativethe effort of the University of Pennsylvania School of Business to increase social change in business.
Last week, the fund announcement investments in its fifth and sixth companies, Tissue health and Stimulusbringing the fund’s total invested capital to $1.35 million.
The Penn Medicine-Wharton Fund for Health was created to invest in start-up companies that seek to positively impact the social determinants of health in and around Philadelphia. According to Brandon Grant, co-director of the fund, it also aims to provide experiential learning opportunities in impact investing for students at the University of Pennsylvania.
According to Grant, the investment fund stands out from those of other health systems because its investment thesis is entirely focused on improving the social determinants of community health. He said the fund is also unique because its investment team is made up of University of Pennsylvania students who span a variety of disciplines. They are responsible for researching companies and performing due diligence on them.
Fabric Health is one of the companies these students recently selected to invest in. The startup works with laundromats and partners with health plans to increase access to healthcare for low-income communities. The startup is based in Philadelphia but also operates in Pittsburgh and Washington, DC.
“Understanding that access to healthcare is a huge barrier to quality care is what led the fund to invest in Fabric Health’s innovative approach,” Grant said. “Their solution of reducing barriers to quality care by having team members work with health insurance companies to provide a variety of screenings and preventative care while people wait for their clothes to be washed and dry was very appealing.”
Stimulus is the other company in which the fund has recently invested. The Philadelphia-based startup sells software to medical practices to help them make their purchasing process more transparent and efficient. Grant said the fund was attracted to the company because it sought to restructure the flow of capital and direct contracts to underserved communities through inclusive sourcing and sourcing decisions.
The other four companies in which the Penn Medicine-Wharton Fund for Health has previously invested include: Trusta client relationship management tool to help people stay out of the criminal justice system; Involvedwho is developing communication software to reduce absenteeism in underserved schools; RecoveryLink, a telehealth platform seeking to increase access to addiction recovery services and peer support; and Lulaa delivery solution for local businesses.
The fund’s investments in Fabric Health and Stimulus account for 37% of total dollars invested since inception, or $1.35 million. The plan is for the fund to invest up to $5 million over three years, Grant said.
The work of the Penn Medicine-Wharton Fund for Health to alleviate health disparities in Philadelphia has also caught the attention of some outside investors. For example, Josh Harris, managing partner of the Philadelphia 76ers, said in june that he and his wife Marjorie will invest $1 million in the companies selected by the fund.
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