MedMountain Ventures launches $10 million biotech fund
iotech products are saving people’s lives and making an impact,” says Katelin Roberts, COO and general partner of MedMountain Ventures (MMV). In fact, without healthcare venture capitalist firms like MMV, Katelin would not be alive today, and neither would MMV’s founder and co-managing partner—Branden Rosenhan.
Not too long ago, Roberts and Rosenhan both suffered from large medical crises requiring neurosurgery―and both came to appreciate their experiences, allowing it to stoke the fire of their, as Rosenhan calls it, “entrepreneurial and innovation bug” in the medical world.
Along with co-founder Saumitra Thakur, MMV began as a venture fund invested in 12 bioscience and biotech companies, including Epitel and ReddyPort. But during their first round of funding, Rosenhan suffered from a hemorrhagic stroke, having to pass the torch to Saumitra as he recovered. Soon after, they met Roberts, who had a newfound passion for biotech after recovering from her own neurosurgery.
Now, the trio has launched a second venture fund of $10 million, focusing on innovative software platforms and services for the mental health field, and they just had their first close in May. They will be fundraising through the end of the year, investing in about 15 to 20 companies, and they have already signed checks for their first two investments: Options MD and Ceresti.
Options MD provides personalized interventions for treatment-resistant illnesses through an AI-driven matching system that connects clients to the right psychiatrists. The software allows patients to receive individualized help and allows specialized psychiatrists to find more qualified leads. Its current focus is on treatment-resistant depression and anxiety—hoping to support the estimated 4.9 million medication-resistant individuals suffering from major depression in America. Currently, the company’s waitlist of 2,500 is growing by about 25 percent month over month.
Ceresti is a digital health company that provides specialized support to caregivers of those with dementia. This program uses technology, education, and remote coaching to teach family members how best to care for their loved ones. Ceresti’s business model is built around Medicare Advantage, which provides benefits to 36 percent of all Medicare beneficiaries, and more and more people are opting in to this insurance. This unique, accessible platform has already helped reduce healthcare costs and improve the quality of care.
According to the team at MMV, they diligently study the potential impact, growth, and risk of each investment they consider. They also take a deep look at the recent policy changes in the industry. With healthcare being close to 20 percent of the US economy, the industry’s success largely depends on political happenings. Studying politics and recent policy changes gives MMV a real sense of who the winners and losers of the healthcare innovation industry will be in the coming years.
MMV also evaluates the founders: can they have a good relationship with the founders and are the founders open to change? Their goal is to meet founders where they are, understanding that medical engineering can’t be taught in a week, but sales, financials, and business models are more learnable skills. In this way, MMV works with and coaches the founder, teaching them to capitalize on their strengths and build a diverse team that can reconcile their weaknesses and propel them to their next round of funding.
Location is yet another factor that plays into their decisions. MMV is opportunistic, and the team will invest in what they believe in; however, investing in Utah-based startups is particularly important to them. Roberts sees Utah as a unique state in the way our communities take care of one another, and she wishes to play a part in that. MMV plans to invest a large percentage of its venture fund into Utah startups, mimicking what they did with their first fund.
There is phenomenal technology in Utah waiting to be seeded, and due to the heavy regulations and high risks involved in the healthcare industry, there’s often not enough funding for these small startups.
Despite the challenges the biotech industry faces—heavy regulations, high costs, and lack of lab space—Utah has stayed resilient and robust through its long history in biotech. In fact, Gov. Spencer Cox just identified life sciences as a target industry in Utah. Utah’s GEC recently reported the life sciences industry grew nearly 5 percent from 2012 to 2017, which was the highest growth rate of any other state in terms of employment. Utah has now moved from the 17th to the 14th largest life sciences sector in the country, indicating this industry is here in Utah to stay.
According to Roberts, if MMV can invest a couple hundred thousand dollars in smart, hard-working startups, they will―because those are the ideas that grow into half a million dollars in a very short period, Epitel being a model example.