Guy's and St Thomas's and Kings College Hospital started the fund in 2021 to see if an NHS VC fund could succeed. Now it has partnerships and funding from US hospital groups.
A health tech fund that started as an experiment for the UK’s National Health Service has worked so well it has now gone transatlantic, with US hospital Cedars-Sinai coming in as a large limited parter to a new fund.
Recently rebranded as Meridian Health Ventures, the company has raised a new, £30m ($40m) fund, which will invest in emerging health tech providers, both in UK and abroad. University College London Hospital (UCLH) has also come in as one of the backers for the initiative, which has dubbed itself “the first transatlantic health tech fund”.
US hospital corporation Hartford HealthCare is also expected to join shortly, expanding the fund’s network, which collectively reaches over 8.5 million patients globally a year.
“We’re building a big hospital VC and not just NHS VC,” Madhav Mahendra, principal at Meridian Health Ventures (pictured above), told GCV.
“It’s a bit of NHS money that’s really leveraged through private money and US hospital money. So we’ve got other VCs alongside the NHS Trusts and a lot of charities and endowments that are actively investing within the space,” Mahendra says.
NHS experiment that is getting US traction
“This story began in the NHS which is where we’re still anchored,” says Mahendra.
Meridian Health Ventures was originally set up in 2021 as KHP Ventures by Guy’s and St Thomas’s NHS Trust, King’s College Hospital and King’s College London.
“The idea was to check if an NHS venture capital fund can exist and succeed. And that’s what we did for the first two years — tried to get into some really good deals and see if there’s an appetite for something like this in the market. And thankfully, there was,” says Mahendra.
The NHS is facing an “imperative to innovate” as it, like many national health services, struggles to continue providing high-quality care amid rising demand and financial pressures. In addition, while the UK creates many healthcare companies, these often are forced to migrate to the US in order to grow beyond a certain size. KHP Ventures wanted to help UK health startups scale faster.
The CVC initially invested between £100,000 ($134,000) and £200,000 in startups to help their technologies find a good product-market fit. In the first two years, KHP Ventures invested in more than 15 deals alongside big VC names including General Catalyst, LocalGlobe and Octopus Ventures.
Then, a number of its companies started getting into the accelerator run by leading Californian hospital group Cedars-Sinai.
“Three of our companies got accepted into the highly competitive Cedars-Sinai accelerator programme, so they noticed us [for our] unique offering and quality of portfolio companies,” Mahendra says.
Cedars-Sinai also valued what KHP could offer startups added value through the hospitals it was affiliated with, including infrastructure, data and a sandbox to trial and pilot products.
“We could find advocates, chairs, clinical experts to join their teams and assist them. So it wasn’t just a cheque that we were offering but a lot more. And that was something that hadn’t been done in this country before. In the US it was very mature,” Mahendra says.
A rebrand ahead of further growth
Soon the team realised the need to grow bigger with a larger fund and more investments, so they spun themselves out of the institutions. Guy’s and St Thomas’s NHS Trust and King’s College Hospital have remained Meridian Health Ventures’ anchor investors and foundation partners.
However, the $50m in total commitments to Meridian Health Ventures now comes from a range of venture and institutional investors including General Catalyst, Speedinvest, the Health Foundation and Better Society Capital.
Meridian invests in digital health, medical devices and back-end systems technology which includes ways to modernise staffing, logistics and inventory management. “These are the three verticals that we focus on and [the portfolio companies] have scaled successfully across a lot of the NHS since we came in two to three years ago.”
Its portfolio includes startups such as Doccla, Deepc, Patchwork, Tympa Health, Apian, iFAST Diagnostics, PocDoc, Phare Health, 52 North and MediShout. Collectively its portfolio companies have deployed their solutions over more than 100 hospital trusts in the UK, with some expanding globally as well.
Mahendra says Meridian is hoping that it can help more UK-based health startups scale at a fast pace.
“A lot of technology is birthed in the UK, but it’s unfortunately raised in the US, and we’re trying to bridge that gap and direct investment, giving them the platform and access to healthcare institutions to catalyse commercial success.”
