Over the past year or so, there have been news of venture capitalists leaving GE Ventures, the corporate venture capital arm of GE. Lisa Suennen, the prominent health IT VC, left even before she had confirmed her next gig [which she did later]. After a six-year stint at GE Ventures, Noah Lewis, also left. He is now managing director at Wolke Capital. And in January Jessica Zeaske, director at GE Ventures, made the leap from corporate venture capital to the world of payer venture capital, becoming partner at Echo Health Ventures.
Now two sources are independently confirming that GE Ventures, with headquarters in Menlo Park, California, is itself leaving — leaving its corporate parent GE to be spun off into its own separate entity.
One source described the GE Ventures subsidiary as simply too valuable in dollar terms to shut down, leading to the decision to spin it out. She did not know whether Sue Siegel, who currently runs the business and is well-regarded, will continue when the new entity launches. Siegel, who had been overseeing the ventures business for several years, was promoted to chief innovation officer in October 2017 amid a large corporate restructuring.
The source said it’s possible that Mohr Davidow Ventures would take over the spun-off entity. Another source confirmed that GE Ventures is being spun out, but said details as to who might run it are still being worked out. A Mohr Davidow Ventures spokeswoman did not immediately respond to a call and email requesting comment.
A GE Ventures spokeswoman provided the following statement:
“During this time of transformation for GE, we are evaluating strategic options for GE Ventures to continue delivering returns for our shareholders and partners. While we can’t comment specifically on that process, we remain committed to supporting our portfolio companies, business units and partnering with the entrepreneurial ecosystem.” Kristin Schwartz said in an email.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
GE Healthcare is also being spun off and a one analyst estimated Wednesday that once GE, which has been shedding businesses to generate cash amid a huge restructuring, completes the spinoffs, the remaining entity may not be worth much.
Schwartz of GE Ventures declined to disclose the total investment GE Ventures has made in startups spanning several different industries, including healthcare. The GE Ventures website lists 86 active portfolio companies, 27 of which are in healthcare. In total, the firm has had 25 exits including the following in healthcare:
Jiff (acquired by CastLight); Heartflow; Nanostring Tech (IPO); Neuronetics (IPO); Quantum Health (now part of private equity firm Great Hill Partners), RainDance Technologies (acquired by Bio-Rad Laboratories); and Valence Health (acquired by Evolent)
Aside from investing in promising startups, GE Ventures has also engaged in incubating companies. In healthcare, the three companies it has incubated per its website are Drawbridge Health, Evidation Health, and Vineti.
Spinning out new venture capital entities is something that we have seen at least one example of lately. In December, NEA carved out $1 billion worth of its mature investments into a new entity called NewCapital to be managed by a veteran partner at the firm. Goldman Sachs took a stake in that newly-created entity.
And GE Ventures itself has been no stranger to the spinning-off business. Back in 1987, Canaan Ventures, an early stage venture capital firm in Silicon Valley, was spun off from GE Ventures. More than 30 years later, Canaan has made strides in the world of healthcare venture capital investing, with heavyweights like Wende Hutton and Brent Ahrens as well as rising stars like Julie Grant on the healthcare investment side.
Photo: Kerrick, Getty Images
