Category Archives: Technology – Insights

Lyra Health: Tackling Behavioral Healthcare

By Bob Kocher and Bryan Roberts

Chances are, you or someone you love has faced a behavioral health issue that required help from a professional. Many of you, though too few given nearly 70% of people in need go undiagnosed and untreated, then found yourself attempting to navigate the system to identify the clinicians and services to match your needs, only to encounter a fragmented maze of information that is not specific, actionable, or up-to-date. With 50 million Americans suffering from behavioral health conditions – anxiety, depression, substance abuse – this is a massive problem. A massive problem that also leads to needless medical costs and complications for patients with untreated behavioral health conditions.

Today, Lyra Health emerged from stealth mode, with seed funding from Venrock. This company lies at the intersection of two of our favorite things: killer teams and large, difficult problems. Led by David Ebersman, Lyra is bringing together terrific talent from Castlight and LinkedIn to transform behavioral health to better serve patients, help patients get better faster, and to learn from the experiences and outcomes of each patient to benefit future patients.

Health IT has been booming recently with much of the focus on lowering healthcare costs by helping patients with chronic diseases get better medical care. Unfortunately, over 35% of these patients also suffer from behavioral health issues, which materially impedes the efficacy of their medical care, while dramatically increasing the associated costs. Working on improving behavioral health for them, as well as the millions of others who suffer from primary mental health issues, will improve health in these patients and spare billions in costs.

Lyra is going to change how people access and participate in their behavioral healthcare. The company will use software and service to bring the best solution to those in need. With each encounter, Lyra will get better at matching patients to providers, learning which approaches work most effectively, and when to intervene if patients are not improving. Like many of our other health IT investments – Athenahealth, Aledade, Doctor on Demand, Castlight, Grand Rounds, Stride Health, Zenefits – Venrock is lucky to partner with amazing entrepreneurs at the company’s formative stages in order to create a product and service that can help so many people.

 

 

 

 

 

Venrock 7: Looking Back & Forward

Last week, we completed the fundraising for Venrock 7, a $450 million pool of capital to deploy as we partner with some terrific entrepreneurs to build great technology and healthcare companies. The establishment of a new fund feels like one part cause for proud announcement and 99 parts assumption of a decade or more of responsibility to relentlessly strive for excellence for our two crucial constituencies – the founders, entrepreneurs and teams in whom we invest and the limited partners who have invested in us.

Venrock got started, depending upon how you look at it, either 76 or 45 years ago.  In 1938, Laurance Rockefeller started doing what we would today call venture investing when he provided the initial capital for both Eastern Airlines and McDonnell Aircraft.  Laurance continued making a new investment or two each year for the next 30 years, at which time the financial construct of venture investment vehicles led to the creation of some of the iconic early venture firms, Venrock among them. “Fund” numbers in this case are a bit misleading in terms of history as, in addition to 30 years of Laurance’s checkbook, Venrock 1, whose portfolio included companies like Apple and Gilead Sciences, was an evergreen fund for the Rockefeller family that invested in new companies over a 30 year period, rather than the 3 – 4 year new investment period that is typical today.

While our core mission and values – to generate great returns by partnering with world-class talents to build businesses that change the way we live – have remained remarkably consistent, most everything else has changed over time.  The areas of compelling investment, the depth of partnership and involvement with entrepreneurs and the competitive dynamics of the ecosystem are nearly unrecognizably altered.  With each of these Darwinian “opportunities” to evolve (and the terrific legacy of Laurance Rockefeller and the early Venrock partners as the standard to which we aspire), we reinvented the Venrock culture and investment team over the last 10 years.  Change and continuous improvement will absolutely be an ongoing effort, but today we are a cohesive, “do the right thing” focused team intensely committed to our partner entrepreneurs and LP’s.

We’ve enjoyed some recent success, though certainly not as much as we hope to create in the future. We have been an investor in eight companies with $1B+ exits over the past five years and, in 2014, have had five IPOs and five M&As, including Castlight Health and Nest. The current portfolio holds promise across a variety of industry sectors – AppNexus, Ariosa Diagnostics, CloudFlare, Dollar Shave Club, Grand Rounds, and Intarcia to jinx only a few.

Going forward we are really excited about what’s happening at the intersection of healthcare and technology, as the opportunity to dramatically remake our healthcare system attracts a quality and breadth of entrepreneurial talent that is truly staggering.  We have doubled down in New York to take advantage of the increasing opportunities in the very fertile, growing New York startup ecosystem. We also see data-driven solutions bringing true value across a spectrum of use cases as massive amounts of data are finally corralled and synthesized to produce real insights and ROI. And we are always trying to keep an eye on what’s around the next corner, experimenting and exploring to latch onto the next interesting area for innovation and growth.

I like our odds, but building companies is hard work. We will catch some breaks and will definitely lose some.  We will make mistakes and do our best to minimize their repercussions – that’s a lot more productive than trying to avoid them all together.  But most of all we will devote ourselves to partnering with really passionate, visionary entrepreneurs and serve them in any way we can to give them an unfair advantage on their road to success.