eHealth Ventures, part of the national network of tech incubators supported by the Israel Innovation Authority, is raising $30 million. The funding being raised by the incubator, which specializes in digital health, will enable it to act as a mini venture capital fund, while it continues to receive benefits from the Israel Innovation Authority. eHealth Ventures CEO and managing partner Talor Sax told "Globes" that most of the money has been pledged and the first closing is expected before the end of next month. The incubator has also announced a strategic partnership with the Mayo Clinic in the US.
The partners in the eHealth Ventures incubator are Maccabi Health Services, Amgen, Cleveland Clinic Ventures, China's SCI Fund, and Medison.
eHealth Ventures VP business development Ophir Shahaf said, "We have already been operating for five years and we were one of the first investors in Israel that focused on the digital health sector, and we are a kind of 'incubator plus' because of the strength of our investors. Today digital health has moved center stage and we want to continue to invest not only in very early stage financing rounds but also in pre-seed and seed rounds in order to continue to support companies and to protect ourselves against sharks, so as not to dilute our holdings." Shahaf is referring to the big venture capital and investment funds as sharks.
"We don't want to go much further than the seed stage, so a $100 million fund would not be necessary, but $30 million is exactly the amount we need, about $2 million per business. In the field of digital health such a sum allows us to invest in companies that are about six months away from the market."
The field of digital health raised $12 billion last year with some companies recording huge deals such as Israeli company KHealth, for example, which raised $132 million and there are quite a few unicorns in the sector. This growth has only come about in the past few years.
What are the leading companies that have graduated from the incubator so far?
Zax: "TikTalk is a venture for children with speech impediments. About 10% of children suffer from speech problems and treatment today is based on a physical meeting with therapists in the field, and for the most part waiting lists are long and costs are high. The company has developed a platform, which offers personal treatment through games that are individually adapted to the progress of each child, using AI. They conducted a trial in Israel to ascertain that the product works and they are now starting sales. The company has raised $2.2 million to date and we hold a 28% stake." "Derma Detect remotely identifies skin diseases, also using AI. The company already has FDA and CE approval after showing that it is accurate in diagnosing skin diseases. Not severe skin diseases or cancer but rashes, stings, allergies and the like. They have raised $2.9 million and we hold a 24% stake."
"Olive is a company that allows urines tests from home without the need to collect urine but through a device which is mounted on the toilet and monitors the urine in flight. The data can be immediately transmitted to the doctor conducting treatment. This is a product that is suitable for people who need to frequently monitor their urine. Pregnant women, cancer patients and more. This company has also shown the accuracy of its product very recently in a feasibility trial and it is now entering clinical trials. We hold a 40% stake and the company has raised just over $1 million to date."
"EFA offers a blood count blood test in any place and at any time with the patients themselves able to conduct the test. Rapid blood count tests currently already exist but they still must be conducted by a professional with large and heavy devices. Here too the product is suitable for somebody who needs to conduct very many test such as those with cancer or autoimmune diseases and who want to know if it is safe to leave the house. We believe that through this test we can distinguish between viral and bacterial diseases." This company competes with two Israeli companies both of which have raised $70 million this year and are already on the market - MeMed and Sight. EFA is expected to begin clinical trials in the coming quarter. "Our stake is 22% and the company has raised $3.2 million so far."
Does the agreement with the Mayo Clinic replace the partnership with Cleveland Clinic?
Shahaf: "Absolutely not. Cleveland Clinic continues to be a shareholder and to support us and we need additional partners who will give us other added value. Both at the scouting level and investment consultancy level, in addition to clinical support and access to top thinkers, which Cleveland Clinic gives us. Mayo Clinic is today more focused on the stages in which we are operating while Cleveland Clinic is more about the later stages."
Who will be your investors?
"In legal terms it is difficult for funds to invest in other funds. Therefore, we are turning to institutional investors, among others, who want to take advantage of the benefits on Track 43 for institutional investments in R&D companies. This is an Israel Innovation Authority track and we have already transferred all our companies to it through the Israel Innovation Authority, and this is very convenient. In addition we are turning to strategic pharmaceutical and biotech companies and to private and family investors."
Published by Globes, Israel business news - en.globes.co.il - on May 5, 2021
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