HealthQuest Capital is looking to make some moves healthcare with its newly raised $110 million fund, looking for unmet needs in medical devices, diagnostics and information technology.
The Sofinnova Ventures-backed investment group garnered a lot of support for its inaugural fund, which was only expected to raise about $50 million. HealthQuest didn’t release the names of its backers, but said that the funds came from "endowments, pensions and family offices," among others.
HealthQuest was born last year from Sofinnova general partner Garheng Kong, who saw an opportunity to differentiate the company’s pursuit of medical devices and molecular diagnostics from its existing biotech fund. Sofinnova, which just raised its own $500 million biotech venture fund, has some investor overlap with HealthQuest, but the firms diverge on strategy.
Sofinnova is providing "back-office support" but the company is sticking to biotech and letting HealthQuest make bets in medtech and diagnostics.
"Many venture investors shy away from diagnostics because of uncertainty about the reimbursement process for novel tests," according to a Sofinnova statement. "HealthQuest’s bet is that companies that provide information that influences treatment decisions and lowers costs will emerge successful."
HealthQuest initially closed its debut fund in 2013 and made its 1st investment last year. The fledgling fund has invested in 3 companies so far: Vestagen Technical Textiles and its healthcare textiles; First Aid Shot Therapy and its liquid over-the-counter drug products; and molecular testing firm Castle Biosciences.