AlleyCorp in Q3
Announcing new incubations, investments, and more from AlleyCorp
Note from Kevin
At the early stage, not much has changed this quarter –– we’re still in a very binary place. There is ample capital available for a good idea and the right team (we’re still seeing a number of competitive deals at high valuations) but for many companies this remains a difficult market. At the later stage, the market is significantly more unforgiving, and we’ll have to wait and see if the mixed September tech IPOs ultimately signal positive change.
The challenges of the current climate remind me of the importance of speed in company building. Across the board, founders are reducing burn to avoid fundraising in this market, and in some cases this results in too much caution. As a founder, time is not on your side. You do not have time to slow down and wait for the fundraising market to shift. Think of your product like a hotel: you can’t unveil it one floor at a time. There’s a big initial investment to build and outfit the entire property, open your doors, and then immediately learn if you’ve built something people want or you haven’t. Be cost-efficient while you build and don’t get lost in the weeds –– but don’t be too afraid to move fast. If you build something people want, you won’t have trouble raising more money to improve and scale.
One of the bright spots I’ve noticed this quarter is the resilience of women’s healthcare, which is where we’ve seen some of the most competitive deals and several new funding announcements. Seeing how many of these deals were led by female VCs is a reflection of the changing environment for these founders and their businesses: a decade ago, a female founder pitching a product tailored for women faced a very different landscape. When you have investors on the other side of the table who are passionate about what you’re building, they often want to be involved regardless of price. With concerted efforts to foster more female investors in our industry, we will see more big opportunities in traditionally underserved markets like this one.
Women’s healthcare is one of many areas where there are still huge problems that have not yet been solved. We continue to deepen our understanding of these spaces all the time –– industries untouched by technology or where customer pains just aren’t getting better. In the coming months, we’ll be formally announcing incubated companies in industries that are completely new for AlleyCorp and that we believe will be growing for at least the next decade.
Team Expansion
We’re excited to welcome Doug Band to the team as a Venture Partner. In his role with AlleyCorp, Doug will lend his experience and network across business, media, government, and philanthropy to add strategic value to AlleyCorp’s diversified group of portfolio companies, with a particular focus on executive preparedness and mentorship, readiness for pivotal business milestones, culture building, and business development.
Prior to joining AlleyCorp, Doug was Co-Founder and former President of Teneo. Teneo has more than 1,500 employees located in 39 offices around the world working exclusively with the CEOs and leaders of the world’s largest and most complex companies, philanthropies, and investment firms.
Doug previously served in the White House Counsel’s office for four years and later in the Oval Office as Deputy Assistant to the President. Doug served as President Clinton’s chief advisor from 2002 until 2011 as the key architect of Clinton’s post-Presidency. He was instrumental in the creation and growth of the Clinton Global Initiative, which benefited 2,100 philanthropic initiatives in 180 countries. Doug has worked with multiple U.S. Presidential Administrations in negotiations to free Americans held around the world; has assisted in the rebuilding of nations and regions after some of the worst natural disasters in the past two decades; and has advised several heads of state, governors, and mayors transition out of public office into private life.
As AlleyCorp has expanded its focus across a wide variety of industries –– including healthcare, robotics, developer tools, materials science and semiconductors, and social impact –– Band’s globally recognized experience founding and building the leading CEO advisory firm, his work as a strategic partner to some of the largest companies in the world, and his deep understanding of public affairs will be broadly applicable to the AlleyCorp portfolio. Additionally, Doug will simultaneously continue his ongoing diplomatic engagement with the U.S. government.
New Incubations
We’re thrilled to announce Jozu, a new incubation in the AlleyCorp portfolio.
Jozu helps business leaders reduce churn and find the opportunities and leads that are ready to convert and close. Their analytics platform gathers detailed product usage data from your software product and finds signals that are correlated to the users and companies in your marketing and sales funnel.
Unlike BI solutions that simply dump all the data into a lake and rely on expensive data scientists to make sense of it, Jozu uses AI/ML to identify opportunities based on 20+ years of experience growing software businesses large and small.
Jozu is led by Founder and CEO Brad Micklea, who was most recently the GM of API Gateway at AWS. He was also VP of Red Hat’s Developer Tools division and has a deep background as a product and business leader. To learn more, visit www.jozu.com.
Portfolio Fundraises
AlleyCorp incubation Affect Therapeutics, a platform for clinically intensive addiction treatment that is all-digital, accessible, and cost-effective, announced a $16 million Series A led by ARTIS Ventures with participation from AlleyCorp, City Light Capital, Samsung Next, LifeArc Ventures, and What If Ventures.
Thyme Care, a value-based oncology management platform, announced a $60 million Series B led by Town Hall Ventures and Foresite Capital with participation from AlleyCorp, Andreessen Horowitz, Casdin Capital, and Frist Cressey Ventures.
AlleyCorp incubation Diana Health, which is reimagining the way maternity and women’s healthcare is delivered, announced a $34 million Series B led by Norwest Venture Partners with participation from AlleyCorp, .406 Ventures, and LRV Health.
AOA Diagnostics, which is building the future of early cancer detection, raised $17 million led by Good Growth Capital to accelerate the development of its liquid biopsy test for ovarian cancer. RH Capital, Y Combinator, Astia, Adaptive Capital Partners, FemHealth Ventures, Labcorp Venture Fund, and others participated in the round.
New Investments
AlleyCorp led the $34 million Series B for TileDB, which is reimagining the database by integrating multiple data modalities, runnable code, and versatile compute in a single product. Two Bear Capital, Nexus Venture Partners, Big Pi Ventures, Intel Capital, Uncorrelated, Lockheed Martin Ventures, Verizon Ventures, and others participated in the round.
AlleyCorp made an investment in Maro, which supports school systems with mental health screening, education, and care navigation tools. Maro directly addresses pediatric anxiety, depression, suicide risk, and more by combining the power of education and early intervention. Kapor Capital participated in the round.
AlleyCorp made an investment in Alice, which helps hourly workers get an extra week of pay, for free, when they spend on transit or parking. Employers connect their payroll, employees connect their spending history, and Alice handles the rest –– no open enrollment, saving receipts, or use it or lose it –– so that employers are compliant, without extra work, for no out of pocket cost. Bonfire Ventures, TTV Capital, and ResilienceVC participated in the round.
AlleyCorp made an investment in Alchemy Health, which builds and operates pharmacies for safety net providers who care for all people, regardless of their ability to pay. In doing so, Alchemy enables safety net providers to keep the margins on expensive drugs like Hepatitis C and HIV medications, enabling them to grow top line revenue and reinvest in delivering high-quality care to the most vulnerable populations. Springbank and Twine Ventures participated in the round.
AlleyCorp Team in the News
“Immigration has been the strength of the United States for over 200 years. Now, it will be the key to our survival on an increasingly competitive global stage.”
Founder and CEO Kevin Ryan authored an opinion piece in Fast Company about America’s restrictive immigration policies and their impact on the tech industry.
“Most people understand the risk of doing something. They understate the risk of not doing something.”
Kevin was also interviewed on My First Million for a wide-ranging conversation about how we build companies at AlleyCorp, what industries he’s betting on for the next ten years, and lessons from his storied career as an entrepreneur.
“Building startups, you see your impact not quarter by quarter or year by year, but in some cases minute by minute –– and that’s an adrenaline rush that you can't replicate anywhere else.”
General Partner Marshall Porter was featured on Pounding the Table where he talked about his career as an operator, the current state of the market, and the trends we are most excited about at AlleyCorp.
“Some organizations use an empty chair at meetings to symbolize the customer’s presence. With my background in medicine and many ‘Doctorpreneurs’ in AlleyCorp’s portfolio, the chair representing the patient is not empty and the physician perspective is always present.”
General Partner Brenton Fargnoli was profiled by Insider as part of the small but growing cohort of VC investors who are medical doctors.
“We have a huge thesis on human-in-the-loop robots. I believe that [AI] will make robotic machinery easier to manage and more capable, but we will still need humans for decades and decades minding it, controlling it, directing it, correcting it. And those can actually be fun jobs –– much better than a job in a hot dusty field.”
General Partner Abe Murray joined Jay Kapoor on CLIMB by VSC for a discussion about the future of automation, where AI fits in, and what we look for in founders.
DHNY Summit
We want to extend a big congratulations to CEO Bunny Ellerin and the entire team at DHNY for setting a new standard of excellence at this year’s DHNY Summit on September 21st. Attendees heard from industry titans like Albert Bourla, CEO of Pfizer, who spoke about the impacts of data and digital transformation on drug discovery, and Mark Bertolini, CEO of Oscar Health, who discussed building a world-class health plan by prioritizing member experience, as well as key policy leaders like Shereef Elnahal, MD, Under Secretary for Health at the US Department of Veterans Affairs, who unveiled a live demo of VR applications in mental health treatment for veterans.
The space was buzzing all day with an incredible turnout of health tech leaders and great conversations both on and off stage –– a powerful testament to New York's thriving digital health ecosystem.
Stay tuned for more information on Summit 2024!
News
Pearl Health announced a partnership with Walgreens to accelerate the expansion of value-based care in collaboration with community-based primary care physicians.
Pearl Health also announced a partnership with Yuvo Health to help community health centers and their patients access innovative value-based care programs.
Dandi is a winner in Fast Company’s 2023 Innovation by Design Awards, alongside industry-leading companies like Canva and Figma.
Kenzie Butera Davis and the Maro team were finalists for this year’s Digital Health Innovation Award at HLTH.
Ryan Grant and Vori Health were also finalists for an award at HLTH: this year’s Digital Health Hub Foundation and Digital Health Awards.
Manav Sevak and Kunaal Naik of Memora Health and Robin Shah of Thyme Care were recognized by Business Insider as 30 Leaders Under 40 Changing Healthcare in 2023.
Four healthcare leaders in AlleyCorp’s portfolio were featured in Primary’s Focal Health Tech: 26 Leaders to Know: Laurence Coman of AvoMD, Gabe Drapos of Pearl Health, Justin Lambert of Nomad Health, and Ishaan Jalan of Yuvo Health.
Transcend Therapeutics and Yale University announced receipt of a collaborative grant award from the U.S. Department of Defense to support first-of-its-kind preclinical research on methylone, Transcend’s lead compound for the treatment of post-traumatic stress disorder (PTSD).
Exavir Therapeutics announced that they received a $3 million award from the National Institute of Allergy and Infectious Diseases (NIAID), a division of the National Institute of Health (NIH), to support the development of XVIR-110, an ultra-long-acting HIV integrase inhibitor.
Conduce Health CEO Eric Rosow was featured on the Forward Obsessed podcast for a discussion about entrepreneurship and building high-performing teams.