GE Healthcare and StartUp Health announced a partnership last week to offer GE mentorship and support to a new class of ten consumer health companies. Startups in the three-year program will be enrolled in the StartUp Academy along with about 65 other companies, but will also receive additional benefits like a dedicated GE executive mentor and access to a “virtual commercial laboratory” to test business models, pricing strategies, and pilot programs.
“GE is a very large global business with tens of thousands of employees,” StartUp Health CEO Unity Stoakes told MobiHealthNews. “So in a sense, it’s this amazing ecosystem unto itself where we can pilot and test innovative health solutions that could then be scaled more broadly.”
Like StartUp’s main business, companies applying to the GE class won’t need to relocate. They’ll attend quarterly CEO summits with the other companies. GE is sponsoring the program through its $6 billion healthymagination initiative. Participation in the program doesn’t include a guaranteed investment from GE Ventures, but it could lead to that.
“It’s just not a guarantee,” said Stoakes. “It’s absolutely a possibility. What we’ve found is that a small amount of capital isn’t what changes the game for an early stage startup. What really matters is a great pilot program or a technology expert who can propel your business forward at a key time.”
GE will, however, earn a 2 to 10 percent equity stake in each of the companies. Stoakes says this incentivizes both groups to really care about each company’s success.
Stoakes said the timing of this deal comes after GE has spent the last six months building a team of experienced healthcare investors. As Xconomy reported, GE has hired three high-profile digital health investors in the last six months: Sue Seigel, CEO of healthymagination, left Mohr Davidow Ventures in May 2012 to take the post. She was followed by Mohr Davidow partner Rowan Chapman in October. And just last week Risa Stack, an investor at the Kleiner Perkins Caufield & Byers life sciences team, left to join Seigel’s team at GE.
Although the recent hires and the partnership with StartUp Health signal a new commitment to digital health entrepreneurship — especially consumer-facing digital health — it’s far from GE’s first move into the space.
In early 2011, GE partnered with Intel to create Care Innovations, a joint venture focused on developing remote monitoring and telehealth technologies. In August 2012, Care Innovations announced it was consolidating to focus on aging in place technologies.
GE forged a high profile consumer app partnership in 2010, partnering with online health portal MedHelp to develop a series of apps for pregnancy, fitness, sleep and mood tracking. As part of the deal, MedHelp CEO John De Souza joined healthymagination’s advisory board.
Stoakes said that though he couldn’t speak for GE, the general trend is that big companies want to get involved with innovators sooner.
“In general this trend we’re seeing is corporate partners wanting to get earlier access to the innovators,” he said. “A lot of the great innovations are coming from startups today and then growing and building very rapidly. Take something like ZocDoc, who a couple of years ago wasn’t around and now you have thousands and thousands of doctors using the platform and this all happened very, very quickly. Corporations are aware of needing to pay attention to the trends.”