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JACK YOUNG, QUALCOMM LIFE SCIENCES DIRECTOR, DISCUSSES MOBILE HEALTH AND PATIENT MANAGEMENT
Despite tangential life sciences sectors experiencing moribund uncertainty, the mobile health and connected health industry has seen a significant influx in capital in recent quarters.
One of the most active players is Qualcomm Ventures, a global telecom corporation. We spoke with Jack Young, Managing Director of the $100M Qualcomm Life Fund (QLF) at Qualcomm Ventures, for his insights.
His investment interest is focused on the emerging wireless health space including wellness and fitness, chronic disease care, remote diagnosis and monitoring, healing and aging in place, health informatics, etc. Jack currently serves as a board observer at QLF portfolio companies including Airstrip, AliveCor and Telcare. In addition, he serves as a board observer at Jana, uCIRRUS, Validity and Visage Mobile. Prior to Qualcomm Ventures, Young was an executive in the Telecomm space.
Young’s experience in both sectors makes him a unique voice in the osmosis of venture capital between mobile technology and life sciences. Young will participate in a panel dedicated to the subject at the 6th AnnualOneMedForum in San Francisco, January 7-9.
Entitled “Connected Health: A Brave New World of Medicine”, the panel will explore future innovation in the space — from how patients adopt real-time monitoring devices and smartphones/tablets to the possibility of implanted computer chips to increase patient care efficiency.
OneMedRadio spoke with Jack Young about investing in this sector, and the points of significant unmet medical need which represent the most promising opportunities.
View the transcript below.
Brett Johnson: Welcome, this is Brett Johnson in New York City with OneMed Radio. Today, I’m with Jack Young who leads the Qualcomm Life Fund, which is part of Qualcomm Ventures, a group that’s active in seeking investments in emerging growth companies in the health information space. Jack will be a panelist on the Connect Health Panel at the sixth annual OneMed Forum in San Francisco January 7th through 9th. Jack, thanks for joining us today.
Jack Young: Thank you, Brett.
BJ: So, Jack, I know Qualcomm is a very big telecomm company, can you tell us a little bit about the general investment strategy of your fund and what you guys are trying to accomplish?
JY: Absolutely. Qualcomm Ventures started year 2000 with a $500M investment, commitment from Qualcomm and since then we have made over a hundred investments and today we have a portfolio of 80 some companies. It is a global organization that we have seven offices in different regions of the globe. Since 2007, our fund started to make investment in digital and mobile health and in 2012 we established a new fund within Qualcomm Ventures, what we call the Qualcomm Life Fund. It’s a hundred million dollar new commitment. To date, we have made seven investments. In fact this morning we just announced a new investment in a company called ClearCare.
BJ: Terrific so and can you tell how did you get involved in the group?
JY: I started Qualcomm Ventures about five years ago. Personally, I have been involved with investment startup since my days in Silicon Valley dated back in the late ‘90s. When the opportunity in Qualcomm Ventures opened up, I took the opportunity. I came here five years ago. My background really is in mobile and the internet and telecomm in general but when I got into Qualcomm, I quickly realized that Qualcomm is very interested in digital and mobile heath. Overall in the industry, there is a general interest in applying digital mobile technology in the health industry to improve the care delivery and ultimately improve the outcome of patient care. So I thought that was a good opportunity so I started to dab into this area about five years ago and have started to make the investment about three years ago and one thing leads to another. I kind of morphed into my specialty and I transitioned to this function about a year ago full time.
BJ: So if you had this sort, you know, offer your general thesis on where the big opportunities are in this space, how would you describe what you think is the big trend?
JY: I think we have studied this market in broad as well as in depth in certain areas. From our perspective, obviously we look at the health from an angle of applied mobile and digital technology so certain areas we think holds a tremendous potential for us to improve the outcomes of I believe a few areas. Wellness and fitness is certainly a big area, [as well as] chronic disease management. Transitional care for example it’s an interesting area as our healthcare is moving towards more ACO model instead of fee for service. We think more and more patients need to be taken care of outside of hospital as well as inside the hospital.
The other megatrend is what we call aging in place. As you know, Brett, there’s 10,000 people in the United States turns 65 and older and the female population about double in the next two decades and I think there’s a tremendous opportunity to apply technology in that area.
Lastly, we also spend some time study what we call clinical trials where we believe the cost of developing a new drug especially in clinical trial stage increasingly [is] more and more expensive so there is a tremendous opportunity to apply mobile and digital technology again to reduce the cost and improve the outcome.
BJ: Can you talk about I guess your most recent investment and why you found that to be a special opportunity?
JY: Yeah I mentioned it earlier this morning which is November 26th we just announced our seventh investment of our fund, the Qualcomm Life fund, a company called ClearCare. ClearCare is in the aging in place space. Specifically they provide a software platform enable what we call the homecare agencies to better coordinate, deliver homecare to the seniors living at home. So what we think is interesting is in the thesis I mentioned earlier, one of the verticals we have identified is so called the aging in place. I mentioned earlier 10,000 Americans turns 65 every day and today there’s about 13% of our population are 65 and older. Unfortunately, this 13% of the population consumes as much as 40% overall cost.
As you know, the next two decades as the baby boomers enter in the retirement age, the population percentage will grow nearly double to over 70 million seniors in the year 2030. So as I mentioned proportionately the senior population is going to consume much more resources than our society is prepared for. So as a result, I think technology is one of the way to bridge that gap. So by investing in ClearCare, we think this is our first investment into this megatrend. I believe many industry leaders and investment group will follow closely of this megatrend.
BJ: Can you talk a little bit about the ClearCare business model and why you found it attractive?
JY: Yeah. ClearCare is basically it’s serving in what I call end serve the market. As you know in Silicon Valley, there’s lots of talk about quantify sales and talk about younger population get healthy but I mentioned it earlier that the older populations really need help. Unfortunately, the older generation today is not as technology savvy as the younger generation so some of the mobile and advanced technology may not penetrate into the senior population faster as we expected. For example tablets and touch phones are still somewhat viewed as advanced by some of the elderly population especially 75 and then older.
However, these people in order to live independently at home, they will need some kind of technology and people help. So what ClearCare provide is basically the first step by moving some paper based workflow and services into a digital age whereby they’re providing a software to allow the homecare agency to better coordinate with the field workers and reporting the senior conditions on the more real time basis so problems can be found earlier and eventually this will lead into a remote monitoring and some more advanced technology we have talked about for many years.
BJ: So can you talk a little bit about sort of the stage of companies you invest in and the size of investment and do you tend to syndicate your investments or do you go in by yourself? Can you talk a little bit about sort of the general approach that you guys take at Qualcomm?
JY: At Qualcomm Ventures, since it’s much mature, we have been in business the last 12 years so the larger fund we pretty much invest in any stages, all stages of the investment cycle. In fact, we started a seed program about two years ago so we’re participating in the angel stage of investment. But in general speaking, you know, as a corporate investor a bulk of the investments started in series A and series B. When they come talk about the mobile and digital health because this is an emerging area, there are lots of innovation and good ideas, however the business model is less mature. So as a result, our fund tend to stay a little bit back and observing what’s happening in the market and them making surgical investment as we believe the winner emerges in this given sector or certain business model proven to taking hold in the ecosystem.
So as a result, our fund has been focused on lately at least focused on a company that IM revenue stage. Typically, we prefer a company has demonstrated close to a million or a million dollar annual round rate revenue and has some serious endorsement from the industry leaders. Secondly, given the nature of life sciences investment, we tend to partner with other investors in the space preferably somebody with a life sciences background. So I think that makes a perfect combination between IT and the life sciences firm to invest at what we call digital or mobile health companies. Our typically check size are $2M to $5M. So typically in most cases, we would syndicate with other corporate or financial VCs.
BJ: Can you talk about like the specifics on the ClearCare case?
JY: ClearCare we are fortunate that they identify the company very early and the company has launched a service since 2010 and rapidly gained traction in the marketplace by winning hundreds of homecare agencies in adopting the software. This is a series A investment that total around $4.6M. We are partnered with Voyager Capital as well as the Pacific Harbor Investment Group. So three of us co-invested in the series A of $4.6M, which we hope take the company into that next stage.
BJ: Are you seeing a lot of deal flow now in terms of companies with new ideas and any sort of insight on what’s happening in the broader market?
JY: Absolutely. The deal flow has been very good especially Qualcomm being in a unique situation, unique position in the market. Not we are a leader in the general big mobile space by established leadership but also we are early starters of a mobile health and digital health. As you know, Brett, just about 10 years ago, Qualcomm starting to champion this area so we have a wealth of history and friends, lots of friends in the industry. As a result, we got a tremendous deal flows.
But generally speaking, you know, there are lots of good ideas, innovation, and unfortunately in healthcare unlike the IT or consumer industry, there’s lots of rules, regulations on boundaries so as a result not every idea will sell through and also tend to take a lot longer to developing a business model than the consumer or the internet space. So we are seeing lots of deals but meanwhile we also being very practical making investment, a sound investment hopefully identify some winners in each of those given verticals I spoke to earlier.
BJ: Interesting. So as you give any –you know, if you had advice to investors, say encourage investors or to entrepreneurs in sort of the digital space within healthcare, what would be sort of the big advice you’d give to people and say look at investments and/or developing companies here?
JY: Yeah. I think the key is healthcare unlike any other industry there are multiple constituents in this space. So often people talk about, you know, whenever you have a new innovation, you need to somehow balance the interest of these multiple participants.
So there’s a 4P model. So any new innovation or idea need to think about what’s there for the patient, is that going to improve the quality of the patient and what’s there for the physician. So if somebody prescribed that service or participated and managed that patient what’s there for the physicians. Obviously, we have to talk about who are the payers and why would they pay for that services and finally obviously as another P, generic speaking the pharmas but that’s applicable to any solution providers here we talked about what’s there for the company. So unless you can balance the interest and line up your interest with multiple constituents it’s really hard to make the solution or a service successful and ultimately scale.
BJ: Terrific. Well there’s certainly a lot of new innovations and a lot of companies that are trying to enter the space. It’s a big and growing space so we truly appreciate your comments today and we thank you for also joining us in January at the JP Morgan Healthcare Conference where OneMed Place is running its sixth annual OneMed Forum. So thank you for your time today, Jack.
JY: Brett, I’m looking forward to that. Thank you again for your time.
BJ: So that is Jack Young who leads the Qualcomm Life Fund, part of Qualcomm Ventures, a group that’s been very active investing in emergencies companies in the health information space. It’s Brett Johnson with OneMedPlace, OneMed Radio in New York signing off. Good day.
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