Q&A: KeyView’s Holistic Stance on Fostering Health IT Startups

One week after unveiling itself as a new player in the health-investing landscape, New York-based KeyView Partners is releasing today a guide for entrepreneurs who want to succeed in the booming health IT startup space. The report—which is called iHealth Ecosystem and has an accompanying website—identifies six major trends driving change in the health care industry. It also spotlights companies that KeyView’s investors believe are doing a good job capitalizing on those trends.

KeyView’s CEO David Shrier says his new firm is just starting to look for investment opportunities across the medical-technology industry and has entered into a term sheet with its first portfolio holding (which he can’t name just yet). The iHealth Ecosystem report reflects KeyView’s approach, which is not just to support startups financially, but also to actively assist entrepreneurs in navigating an increasingly complex health care system.

Shrier recently spoke with Xconomy about opportunities in health technology, and how his new firm will be positioning itself to take advantage of them.

Xconomy: What trends were you seeing that inspired you to start KeyView?
David Shrier: I’ve very interested in the intersection of data, technology and health. I started KeyView with Tom Gardner, who has been a very successful healthcare executive. He was a division president at J&J and ran a number of public and private companies that lived at the intersection between health and technology. My own background also bridges health and technology. I got a biology degree from Brown and did research using computer control systems. Then I became a data programmer on Wall Street. I got into venture capital and technology and was involved in a lot of interesting businesses, including building a data analytics system for Dun & Bradstreet. Tom and I had been talking for about four years about the future of healthcare. More recently we decided we wanted to get actively involved together and started KeyView.

X: How will your investment approach differ from others working in the area?
DS: We are operating investors. Teams work with us because they feel we bring a certain point of view and skills that augment what they’re doing. I distinguish operating investors from what you’d call pure financial sponsors. We at KeyView have all held profit and loss responsibilities, made payroll, been CEOs or functional leaders within our organization. So the fact that we are operators first is a differentiator in the marketplace.

Another differentiator that’s more specific to the opportunity is that we have a particular thesis and point of view on where healthcare is going over the next decade, and we are positioning ourselves to help drive that change. We think that healthcare globally is in crisis. We think for-profit enterprises can take a significant role in fixing these problems rather than waiting for the policymakers to fix them.

X: So what is your prevailing view of where healthcare is going?
DS: The emerging trend we see is interconnected health care. What we found startling when we began doing our research was that we believe there will be over 250 trillion interconnected nodes in the healthcare system by 2020. That is the same number of neuron connections in the human brain. That is a profound … Next Page »

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