Norden will be part of Vator's Future of Mental and Behavioral virtual event in May
Steven Loeb and Bambi Francisco interview Justin Norden, a partner at GSR Ventures, where he focuses on early-stage investments in digital health, AI/ML in healthcare, and enterprise technology. He has led investments in Sparta Science and Limbix. GSR has $3 billion under management and it is currently investing out of a total $650 million fund.
(Norden will be speaking at our May 19 Future of Mental and Behavioral virtual event. We'll have top-level VCs and C-level executives from the leading mental and behavioral companies, such as Teladoc's BetterHelp, Amwell, Doctor on Demand, Kaiser Permanente, Bessemer Ventures and more)
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For these digital health podcasts, our goal is to also understand these three high-level questions: How are we empowering the consumer? Are we creating productivity that also allows us to see overall economic costs go down? How is this advancement changing the role of the doctor?
Highlights from the interview:
- GSR focuses on digital healthcare and typically invests at the Series A or B stage, with initial checks in the $3 to $15 million range. The firm will invest around $50 million over the life of a deal. Some of the companies in the GSR portfolio include Kinsa, Medable, Deep 6 AI and AppliedVR.
- Two area that work well with telemedicine are mental health and musculoskeletal care. With mental health, a lot of it can be done at a distance, so that's a natural place for telehealth to start. Companies like Hinge in musculoskeletal care space have seen explosive growth as well, as patients are overall healthy and can go physical therapy from a distance. Going forward, telehealth will enter more complicated aspects of the healthcare field, including oncology.
- In some ways COVID has had a huge impact on how GSR invests, in other ways it has changed nothing about how the firm is evaluating and looking at companies. Early on, in February and March of last year, things briefly stalled, since everyone was unsure of what was going to happen. Since then, some of GSR's portfolio companies have seen explosive years, as these solutions that always seemed to make sense, but were a few years out, suddenly saw demand shift quickly.
- COVID has proven out GSR's thesis in digital health, which it started looking at in 2015, but it hasn't changed what kinds of companies it is looking to invest in; that means teams and entrepreneurs who want the capacity to grow a company to $1 billion in revenue.
- In a piece published on Vator, Norden wrote about how emerging technologies are relieving the pressure on our mental health system: technology has already been making a difference, including with telemedicine and teletherapy, but that doesn't go far enough, as it doesn't change the supply of mental health providers, it only slightly increases access. It's the solutions that can scale what a provider can do, such as digital therapeutics and chatbots, that will help providers meet the demand.
- These technologies will not replace the doctor, but enhance their capabilities, and allow them to focus on the patients who really need care. Historically, innovation has increased the cost of care, so Norden expects them to go up in the short run but, potentially, go down in the long run as the patients can access the first level of care more cheaply.
- Norden's vision for the future of healthcare is that telemedicine will be a first solution in a much more ubiquitous way across the country, and that there will also be an increase in the use of digital therapeutics. Fundamentally, the reason that Norden is an investor, and not a physician, is that these changes need to happen and technology is going to make the system significantly better over the next 10 years.
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Steven Loeb
