Last week, General Catalyst launched a $670 million healthcare investment fund. The fund, called Health Assurance Fund II, seeks to carry on the mission of the venture capital firm’s first healthcare-focused fund, but with a new focus on health system partnerships.

In April of last year, General Catalyst rolled out its $600 million Health Assurance Fund. The company launched the fund to further its vision of “health assurance,” which refers to an alternative category of healthcare that is consumer-driven and designed to help people sustainably manage their health instead of only seeking care when they are sick.

“It’s a really full continuum mindset that’s designed around growing value,” said Daryl Tol, head of the health assurance ecosystem at General Catalyst. “It’s about changing healthcare to focus on our whole lives and us as whole people, instead of healthcare as a very brief period of interventional interactions when sickness occurs.”

To advance the vision of health assurance, the new healthcare fund will use money from the $4.6 billion general fund General Catalyst raised in February to invest in companies focused on reimagining the patient experience. Tol said these investments will involve a mix of new startups and companies that General Catalyst has an existing relationship with.

He also said the fund will invest in “a very diverse” set of startups that address a wide variety of healthcare pain points. This will reflect the diversity seen in the first health assurance fund, which included investments in Olive, Aidoc, Transcarent, BrightInsight, Cadence, Truvian and SonderMind.

General Catalyst will continue to further its vision of health assurance by building partnerships with health systems through the fund. Health system partners will receive access to the technology General Catalyst invests in and be able to pilot these new tools. The health systems will provide the venture fund with valuable insight about how technology fits in with their clinical and operational workflows, as well as which areas of the care journey they are looking to transform first. 

As the former president and CEO of AdventHealth Florida, Tol said he is especially excited about this initiative because it will help General Catalyst better understand how hospitals strategically deploy new technology.

“Rather than attacking without understanding, we want to become a part of driving and growing insight, and then bringing solutions that help,” he said. “That’s where we see the magic — in this radical collaboration. We can’t be as good — and health systems can’t be as good — separately and in silos. It really takes a team effort.”

So far, the venture capital firm has signed partnership agreements with HCA Healthcare, Jefferson Health and Intermountain Healthcare. General Catalyst expects to add five to seven more health systems partners before the end of the year, according to Tol. As it pursues partnerships during the second half of this year, General Catalyst is seeking to team up with a variety of health systems so that all hospitals can feel represented in this work — whether they are urban, rural, for-profit, nonprofit, academic or pediatric.

To Tol, Health Assurance Fund II’s approach of partnering with health systems sets it apart from other healthcare venture funds. He thinks this collaboration will be a key differentiator as the General Catalyst begins to bet on the technology it thinks will shape the post-Covid healthcare landscape.

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