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Optum forms $250 million venture fund to invest big in healthcare innovation

Optum Ventures will combine the funding, analytics capabilities and its vast network to make bold bets on emerging digital health companies.

Susan Morse, Senior Editor

Optum on Tuesday announced the creation of the venture fund Optum Ventures, which has $250 million to invest in digital health startup companies.

Optum Ventures will invest in companies that use data and insights to help improve consumers' access to healthcare services and how care is delivered and paid for, according to a statement from UnitedHealth Group, Optum's parent company.

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Optum CEO Larry Renfro is managing partner of Optum Ventures, but though the company is also funded by Optum, it will operate independently under the leadership of partners A.G. Breitenstein and Virginia McFerran, UnitedHealth Group said.

Breitenstein and McFerran will run the venture fund offices in Boston and Menlo Park, California. Both have experience in starting, advising and leading innovative healthcare enterprises.

[Also: Optum's acquisition of Advisory Board seems destined for success, but caution required, consultant says]

Optum Ventures has made four initial investments, in Apervita, Buoy Health, Mindstrong Health and SHYFT Analytics.

Apervita is a cloud-based platform that reduces the time it takes to build and deploy analytic applications to enable healthcare professionals to deliver better care, and enterprises to gain stronger insights.

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Buoy Health has developed an artificial intelligence-powered digital health assistant that helps patients better understand their symptoms and get advice on where to go and what to do next.

Mindstrong Health technology uses machine learning and artificial intelligence to assess a patient's smartphone interactions to help diagnose and treat neuropsychiatric and neurodegenerative disorders such as depression, schizophrenia and post-traumatic stress disorder.

SHYFT Analytics provides a cloud-based data and analytics platform for life sciences companies, enabling them to reduce cost and risk while increasing clinical and commercial performance, with a focus on oncology, cardiovascular disease, diabetes, and other specialty and rare disorders.

Optum has been a highly successful and profitable arm of UnitedHealth Group, using its technology-enabled health services business to work with about 300 health plans, including the insurance arm of UnitedHealth Group, UnitedHealthcare, the largest health insurer in the nation.
Optum has virtually every payer and over 5,000 hospitals in its portfolio.

This month Optum completed its purchase of the healthcare division of The Advisory Board, in a deal valued at $1.3 billion.

Entrepreneurs working with Optum Ventures gain not only capital investment, but Optum's analytics capabilities, strategic guidance and knowledge of how health systems work and perform, UnitedHealth said. Startups will gain a proving ground to research, test and innovate new solutions to bring solutions to market more quickly.

"Optum Ventures is uniquely positioned to help develop and grow startups and early-stage companies through capital investment, Optum's decades of experience in healthcare, and our access to the healthcare marketplace," Renfro said. "Optum Ventures will be the partner of choice for companies developing innovations that help make healthcare work better for everyone."

Twitter: @SusanJMorse
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