Oak HC/FT Secures $1.4 Billion Fund for Healthcare and Fintech Investments

Annie Lamont, Andrew Adams, and Tricia Kemp, the general partners at Oak HC/FT, demonstrated foresight by investing in both the healthcare and fintech industries prior to their widespread recognition. This early vision, coupled with several successful company exits, has resulted in the firm amassing over $1 billion in new funding.

New Fund Details and Growth

The firm recently announced the successful closing of a $1.4 billion fund, its largest to date. This investment vehicle will be dedicated exclusively to supporting companies operating within the healthcare and fintech spaces. Previously, Oak HC/FT raised $500 million, $600 million, and $800 million for its earlier funds. Consequently, since its inception in 2014, the firm has tripled its total assets under management within a six-year timeframe.

Notable Exits and Investment Strategy

Throughout its history, Oak HC/FT has achieved six significant exits. These include Anthem’s acquisition of Aspire Health, Core Informatics being acquired by Thermo Fisher Scientific, Diplomat’s acquisition of LDI Integrated Pharmacy Services, Maestro Health’s acquisition by AXA Group, GoDaddy’s acquisition of Poynt, and Limeade’s initial public offering. The firm has chosen not to disclose specific information regarding its internal rate of return (IRR) or the number of portfolio companies currently planning to go public.

Fund Allocation and Investment Stages

The fourth fund established by the firm will be allocated across approximately 20 companies. Investment amounts will range from $60 million to $100 million per company. Oak HC/FT actively invests in businesses at both the early stage and growth stage of development. This new capital infusion arrives at a pivotal moment for both sectors, which have experienced substantial innovation and increased adoption due to the impact of the coronavirus pandemic.

Sector Trends and Increased Funding

For instance, funding for digital health ventures reached unprecedented levels in 2020, exceeding $10 billion during the first three quarters. This represents a significant increase in investment activity compared to the previous year. Fintech, despite initial challenges, has also seen a surge in capital investment to meet growing demand, leading to escalating valuations.

Focus Areas within Healthcare and Fintech

Adams explained to TechCrunch that the firm is prioritizing startups focused on reducing healthcare delivery costs and improving patient engagement, particularly for those with complex medical needs. Lamont highlighted the “incredible virtualization” of both healthcare providers and patients over the past year. A key area of focus is startups that embrace risk-based provider models, signaling a strong interest in the shift towards value-based care, which incentivizes outcomes rather than simply the volume of services provided.

Telehealth and the Consumer Experience

Regarding telehealth, Lamont clarified that while adoption has accelerated, successfully implementing it “at scale remains unbelievably complicated, a nuance often overlooked by the general public.” The firm is actively seeking startups that can enhance the consumer experience within telehealth, effectively replicating the role of an in-person receptionist.

Convergence of Healthcare and Fintech

Oak HC/FT is also exploring startups that integrate healthcare and fintech solutions, specifically around payments and the digitization of billing processes. Kemp noted a decreased interest in standalone point-of-sale systems and a growing focus on solutions that streamline payment processes. Rapyd, a portfolio company specializing in e-commerce optimization, recently secured $300 million in funding at a $2.5 billion valuation in January.

Specific Subsectors of Interest

Other areas of interest include digital consumer payments, as demonstrated by investments in Namogoo and Prove, and fraud and risk identification, exemplified by Au10tix and Feedzai.

Diversity and Inclusion

Concerning diversity, Oak HC/FT reports that women currently hold 26% of C-suite and executive leadership positions within its portfolio companies, and 52% of senior management roles are filled by women.

Portfolio Growth and Follow-on Investments

To date, the firm has invested in nearly 100 startups. In 2020 alone, 20 of the 35 investments made were follow-on rounds, demonstrating continued support for existing portfolio companies.