Velocity has launched a new healthtech fund for early-stage startups. In its first close, the fund has reached 80 percent of its $1 million USD target.
“We’re on pace to create high impact global healthtech juggernauts for Canada based out of the Waterloo Region.”
The Velocity Health Tech Fund represents the incubator’s second pre-seed fund and will make investments of $50,000 to support founders working in areas such as medical devices, therapeutics, diagnostics, digital health, and emerging health sector spaces. The fund, formed in partnership with Communitech, will also invest in the winners of the Velocity Fund Pitch Competition.
Velocity has not explicitly disclosed the funds LPs, but a press release named Dave Caputo, a past-chair of the board at Communitech and Richard Weinstein, an ophthalmologist based in Kitchener, as individual investors in the fund.
“The rise in health technology companies incubating at Velocity reflects an increasing number of founders wanting to dedicate their energy and passion to simultaneously capture not only revenue from a multi-trillion dollar market, but also an opportunity to improve longevity and manage or cure disease,” said Adrien Côté, Velocity’s executive director.
The number of healthtech companies at Velocity has increased over the last six years, and over one-third of its incubated companies were in the healthtech sector in 2019. There are currently 27 healthtech startups being incubated at Velocity, and a third of those are in the process of, or have already completed, preclinical studies, while two are in human clinical trials.
Velocity stated that it has been reshaping its work to better meet the needs of healthtech companies. Last year, healthtech giant PerkinElmer moved its Canadian demonstration lab to Velocity’s space. The incubator also said it has furthered its engagement with research labs likely to have healthtech spinouts, and has added business advisors with more healthtech experience.
In November, alumni and current companies of Velocity reached more than $1 billion CAD in venture capital since the incubator was launched 11 years ago. Velocity claims that since 2013, its incubated healthtech companies have gone on to raise over $50 million CAD in private investment.
“More early-stage investment is required to fuel a thriving healthtech startups scene,” said Caputo. “Combined with the benefits of Velocity’s highly differentiated startup resources and Communitech’s scale-up programs, we’re on pace to create high impact global healthtech juggernauts for Canada based out of the Waterloo Region.”
“As our world faces growing (and already massive) challenges in human health, the commercialization of health technologies will be essential,” Côté added. “Simply put, it’s good business.”
Image source Velocity