Nashville-based Jumpstart Health Investors has launched a new fund to invest exclusively in black-based health technology businesses.
The funding round brought together nearly 100 investors, including Eli Lilly and Company, HCA Healthcare, Cardinal Health, Meharri College of Medicine, Vanderbilt University, American Hospital Association, Bank of America and Pinnacle Financial Partners, to raise $ 55 million for a seed fund. dubbed Jumpstart Nova.
The firm has already made four investments, including a virtual EHR platform for patients with autoimmune diseases, a biotechnology platform focused on innovation in cell therapy, a technology-supported mental health service provider for children with autism, and a food allergy management startup.
Marcus Whitney, Co-Founder of Jumpstart Health Investors, will become Managing Partner with Catherine Cooper, former co-director of the West Coast Pediatric Technology and Innovation Consortium.
The fund has been operating since August 2020 and has raised $ 10 million in the first few months, Whitney said. The original funding goal was to raise $ 30 million for investments in healthcare IT, digital health, technical services, diagnostic devices, biotechnology, medical devices, and consumer health and wellness companies. With the additional capital, Whitney hopes to invest in more than 20 of Black’s businesses, ranging from $ 250,000 to $ 3 million per investment.
In addition to bringing innovative medical technologies to the national market, the fund aims to increase the share of black-owned companies in the US healthcare sector, which currently stands at less than 5%, according to a press release.
Funding for black startups in the US quadrupled in 2021, but remained disproportionate to the country’s overall demographic. Nearly $ 1.8 billion were invested in black-owned startups in the first half of the year, according to data compiled by Crunchbase, representing just 1% of total U.S. venture capital over the same time period.
Jumpstart is also focusing on expanding investment networks by black leaders and entrepreneurs, Whitney said. According to the 2020 Venture Capital Human Capital Survey by Deloitte, Venture Forward, and NCVA, only 4% of all investment professionals are black.
James Hildreth, president and chief executive officer of Meharri College of Medicine, the fund’s strategic investor, said the inequality reflects the number of black medical practitioners in the country and that it will require “bold approaches and ventures” to correct it.
“Jumpstart Nova’s support for black-based healthcare companies is just that kind of innovative thinking,” Hildreth said in a press release.
The effort began with a letter that Whitney sent to Nashville’s healthcare executives in 2020, he said, and quickly grew into an oversubscription fund with a large network of medical and financial players.
“I had the opportunity to create something that could be transactional because it’s an investment of money,” he said. “This is not the same as working on board diversification, which can take five years or more. This is something that can be done relatively quickly, but it can also lead to transformation. ”