Health IT Venture Firm Rebrands as Flare Capital Partners, Closes $200M Fund
The healthcare technology-focused venture capital firm formerly known as Foundation Medical Partners is rebranding as Flare Capital Partners. The new name coincides with the close of a new $200 million fund, from which Flare has already made five investments, according to general partner Michael Greeley.
Boston-based Flare decided to rebrand because of the heavy use of the word “foundation” among other venture capital firms and Boston businesses, says Greeley, who joined the firm in 2013. Flare will manage the existing three funds still operating under the Foundation name.
With the new $200 million fund, Flare plans to invest in companies targeting broad, meta themes in healthcare: issues such as how providers get paid based on outcomes, infrastructure security in terms of fraud and operating on the Internet cloud, and even basic issues such as how physicians can better communicate with patients virtually, Greeley says.
“Where we think the greatest source of innovation is around business model innovation,” said Greeley, who is an Xconomist. “The innovation we saw in financial services and advertising and commerce in the last 15 years, we’re really at the knee of the curve of that rolling out in the healthcare landscape.”
The firm has already announced three investments, including Cambridge, MA-based Iora Health, New Hampshire-based Predilytics, and Chicago-based Valence Health. Iora received $28 million in funding in January, and the company’s work to take on the risk for 100 percent of a patient’s outcomes is what sets the business apart, Greeley says.
“Your current doctor doesn’t do that. If you don’t get well, it’s not like he doesn’t get money,” Greeley says. “This is a complete business model reinvention.”
Flare gained some new limited partners as investors with the new fund, Greeley says, including about “a dozen of the best brands in healthcare.” While he wouldn’t name names, Greeley said they include providers, healthcare systems, payers, and some large healthcare retailers. Traditional pension fund investors and family offices also invested, as well as some international state-owned investment companies and sovereign wealth funds, Greeley says.
Flare also contributed to Rock Health’s most recent seed fund, which Greeley said gives a good window into West Coast businesses. There is one other company Flare has given money to that has yet to be announced.
Along with announcing the new name, Flare hired a new partner and chief financial officer: Kristen Laguerre, who was most recently a partner and CFO at Atlas Venture and previously worked at SoftBank Capital. The firm also hired Dan Gebremedhin as a senior associate. He previously worked at the Harvard Pilgrim Health Plan, where he was the associate medical director focusing on population health and medical informatics solutions.
Foundation Medical Partners was founded in 2001 through a partnership between the Cleveland Clinic and Canaan Partners, Greeley said.