Redesign Health, a company that builds other healthcare startups, tells Fast Company it has raised $65 million in fresh capital as it pushes forward in its goal to create dozens more startups in the next five years.
The round brings the company’s post-money valuation to $1.7 billion, according to a source with knowledge of the funding. (Redesign declined to comment on the valuation.)
Founded in 2018 by CEO Brett Shaheen, Redesign’s team of about 300 researches, assembles, brands, and launches healthcare startups by tapping into its team of entrepreneurs, healthcare industry operators, business analysts, and investors. Though the company has often been compared to a VC fund or accelerator, Redesign sets itself apart by not fitting into a single box.
Redesign researches healthcare sectors and spots issues or areas that could benefit from innovation. It then puts together a thesis and begins product development. From there, it launches a startup and puts together a leadership team.
The latest funding will benefit Redesign’s own operations and platform, rather than being doled out to the operating companies it has founded.
So far, Redesign has launched more than 40 companies since its inception, including Ever/body, which focuses on cosmetic dermatology; cancer-care company Jasper; and metabolic health company Calibrate.
“We have a long way to go but through this process have developed a platform and a process that we think fundamentally changes the risk equation for innovation,” Shaheen says.
Redesign plans to create more than 25 companies this year alone, according to Shaheen. “We’re consistently reinforced in our conviction that healthcare requires innovation at scale, and is facing a desperate need for innovation that our model can play a part in addressing.”
Though venture capital investment in health tech hit a fever pitch in 2021, broader macroeconomic concerns have led to a slowdown in deals—wich makes Redesign’s Series C all the more notable.
Healthcare venture funding reached nearly $82 billion in 2021, according to data from Crunchbase, which also reports that the sector has raised just over $35 billion so far this year.
Funders behind the deal point to healthcare being a field with long-term promise even amid warnings signs of a downturn.
“If COVID launched many trends, one of them was an acceleration of elements of healthcare transformation that are important,” says Daryl Tol, who leads VC firm General Catalyst’s Health Assurance ecosystem. He adds: “It’s important to continue to invest in great ideas, and we know [that] in healthcare, the good companies and the great ideas do survive and thrive and grow.”
Tol’s firm led the recent funding round, and as part of the deal Hemant Taneja, General Catalyst CEO and managing director, has joined Redesign’s board. CVS Health Ventures and several others, including UPMC Enterprises, TriplePoint Capital, and Samsung Next also participated in the round.
“What I don’t think has fundamentally changed is the opportunity to bring innovation to bring much better consumer experiences—innovative adopted business models that align incentives and drive value,” Vijay Patel, CVS Health Ventures partner and cofounder, tells Fast Company.
In addition to investing, CVS Ventures, General Catalyst, and UPMC Enterprises have entered into innovation agreements with Redesign Health, meaning the firms can leverage Redesign’s platform tools, technologies, and insights to help build and support dozens of businesses.
“The shape of these relationships will evolve over time,” Shaheen says, “but we expect it to yield dozens of new innovations and companies over the coming years.”
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