Offline Ventures: A Look Inside the Apple-Backed Startup
Offline Ventures: A New Approach to Investing in Mental Health and Hardware
Last year marked the formation of Offline Ventures, a novel venture firm established by entrepreneurs and investors Dave and Brit Morin, alongside James Higa, a former senior director at Apple with nearly twelve years of service, and Nate Bosshard, a co-founder of Tonal. Notably, Apple serves as an anchor investor in this new enterprise.
The firm’s core concept centers on leveraging the team’s combined expertise in mental wellbeing and hardware development to influence Apple’s future strategies. However, their scope extends far beyond this, encompassing the incubation of several promising startups. Recent discussions with the Morins – both of whom began their careers at Apple – provided further insight into their vision, as detailed in the following excerpt from a longer conversation.
The Genesis of Offline Ventures
TC: Your debut fund has reached $100 million in commitments. What prompted the launch of a new fund amidst the pandemic, and what led to the collaboration between the four of you?
BM: Dave had previously stepped down from Slow Ventures and was exploring angel investments, seeking a return to both entrepreneurship and investing. I, having led Brit & Co. for nearly a decade, recognized that only 2% of venture capital funding is allocated to women. I believed that the most impactful way to advance my mission of empowering women was to directly fund their ventures.
James, after a nearly thirty-year tenure reporting to Steve Jobs at Index Ventures, expressed interest in joining the team. Nate, whom we’ve known for over a decade, had a proven track record of successful collaborations with us. We shared common interests while also bringing distinct networks to the table.
The Focus on Mental Health
What is the rationale behind the strong emphasis on mental health within Offline Ventures?
DM: This stems from both personal experience and a long-standing commitment. Following the sale of Path in 2015, Brit and I established the Sunrise Foundation, dedicated to finding a cure for depression and all forms of mental illness. For nearly seven years, we’ve funded foundational research in mental health, becoming deeply invested in both the science and the alleviation of suffering – not only within our communities but also among founders.
It became increasingly difficult to overlook the pervasive mental health crisis in Silicon Valley, a challenge that, while improving, remains a significant concern. We aim to address this issue directly, embedding it into the core of our investment strategy.
Areas of Investment and Innovation
What specific areas within mental health are most compelling to Offline Ventures?
DM: Telemedicine experienced rapid growth even before the pandemic. We invested in Brightside, a telemedicine company for depression, in a previous fund. We’ve also invested in Done, a telemedicine provider specializing in ADHD and improving access to medication. We are also focused on enabling the healthcare system and direct therapeutics.
We are particularly interested in “digital drugs,” or digital therapeutics. Meditation apps were the leading category in the App Store prior to the pandemic, demonstrating a societal need for balance. We envision a future where digital technology can remotely regulate brain and body states, and are actively exploring these possibilities.
Apple’s Role and Potential Integration
Given Apple’s investment, is there an expectation of integrating mental healthcare interfaces into their devices?
DM: Absolutely. Prior to Apple’s investment, we initiated a philanthropic project at Sunrise, collaborating with Apple and UCLA on the largest genetic study of depression and mental health globally. This ten-year study, involving 10,000 participants annually, aims to identify objective measures of mental health.
Currently, mental health diagnoses rely on subjective assessments. Psychiatrists are unique in their ability to prescribe medication without objective diagnostic tests. The UCLA study seeks to correlate genetic markers with digital data to establish objective criteria for diagnoses.
Apple is now a technology partner in this study, similar to their collaboration with Stanford on heart health. They are providing technology to create a wristband that monitors galvanic skin response.
Privacy Considerations and Future Outlook
Could we anticipate the Apple Watch proactively inquiring about our mental wellbeing? What privacy concerns arise from a company like Apple monitoring mental health data?
DM: Such a scenario is not imminent. The study is entirely voluntary, limited to participants who have opted in. The focus is on exploring the feasibility of using data and sensors to aid in mental health diagnoses. Studies have shown that even simple signals can provide valuable insights into mood and behavior, potentially accelerating access to intervention. Saving lives is the ultimate goal.
Apple prioritizes data privacy, and any future implementation would undoubtedly respect user privacy.
Beyond Mental Health: Personal Health and Web3
Is Apple the largest investor in the fund, and is it typical for Apple to invest in venture funds?
DM: Apple has made investments in a few funds, including those of SoftBank and TPG, as well as several funds supporting BIPOC communities. However, this relationship is unique, built on decades of trust and mutual understanding.
Given Nate Bosshard’s background, is Offline Ventures interested in connected fitness investments?
BM: Indeed. 80% of the fund is dedicated to traditional investments, while 20% is allocated to incubating new ideas. Our first incubation project, Ancient Ritual, is a multisensory connected sauna led by Nate. We are open to connected hardware, recognizing its challenges and the importance of strong teams and funding.
You made a significant investment in Clubhouse. Do you believe it can regain its momentum?
DM: Yes. Every time we invested, similar questions arose, only to be followed by renewed growth. We view Clubhouse as a pioneer in audio-based social networking, with a talented team and a commitment to fostering constructive dialogue. We believe it addresses a critical need for more nuanced communication in the digital age.
Are you exploring creating your own social networking platform through Offline Ventures?
DM: Absolutely. We see web3 as an opportunity to create a more equitable internet, aligning the incentives of users, platforms, and creators. We are particularly interested in exploring new governance models.
Many web3 projects require users to pay for services, while traditional platforms offer “free” access in exchange for data. Do you believe web3 will remain niche?
DM: The situation is analogous to choosing between free and paid magazines. Each offers different value and community. We’ve largely operated within the “free” model for the past two decades, but the future may see NFTs integrated into everyday transactions.
The current cost of participating in the Ethereum ecosystem is prohibitive. However, alternative blockchain technologies like Solana offer faster, more efficient, and affordable solutions.
BM: My personal mission is to promote gender equality within these emerging internet ecosystems. I hosted a cryptocurrency conference for women four years ago, attracting over 20,000 attendees. At the time, women represented only 4% of cryptocurrency holders. Today, that number has risen to 20%, but a significant disparity remains. We aim to provide education, access, and financial opportunities for women in this space.
We are actively incubating projects to address these challenges and empower a more diverse and inclusive web3 community.