Private health insurer HCF has announced an AU$5 million (US$3.5 million) investment in XT Ventures, the nation’s first venture capitalist fund for start-ups in the health, wellness, sport and fitness sector.
The cornerstone investment – which will be made through HCF’s health tech accelerator program, Catalyst – will help XT Ventures support health-focused innovations.
Over six years, Catalyst has backed more than 80 of the country’s most pioneering start-ups and scale ups in the health space.
WHY IT MATTERS
“At HCF, the health of Australians is our priority. That’s why we are always looking at ways to foster innovation within the healthcare system,” HCF CEO Sheena Jack said.
“We need disruptors to push the boundaries and through this investment we’re able to support that growth. There’s a really strong link for HCF and our members in terms of preventative healthcare and the types of startups that XT Ventures will invest into do really innovative things to help Australians improve their overall health and wellbeing.”
XT Ventures Managing Partner Craig Lambert said the fund was delighted to announce the investment and support fo the startup ecosystem which will increase opportunities in the health and wellness space.
“The global pandemic has accelerated digital adoption particularly in the sport, fitness, wellness and health sectors, so the time is right for both the fund and our investors to shape the future in this space,” Mr Lambert said.
“HCF has a really deep pedigree in helping innovative startups. Together with HCF’s knowledge of the healthcare system we look forward to supporting innovations that can change the trajectory of the health of Australians.”
HCF is Australia’s largest not-for-profit health fund and covers more than 1.8 million members.
XT Ventures has focused on sport, fitness, wellness and health start-ups for the high growth potential combined with the benefits that innovation and technology can have on the health and wellbeing of Australians. It aims to invest in a sector poised to take advantage of emerging technologies, such as Web3, blockchain, NFTs, the metaverse, AI, IoT, machine learning and 5G.
THE LARGER CONTEXT
Digital health technologies are part of the effort to improve outcomes and lower costs as pressures continue to impact the healthcare system, patients and insurers.
Over the past ten years the price of health services for consumers has climbed 40 per cent in Australia.
The federal government claims almost nine out of 10 visits to GPs are bulk-billed, but health insurance law academic Dr Margaret Faux said last week the data has been drastically overinflated, with many people forced to pay out of pocket expenses above the Medicare rebate.
Only 35 per cent of specialist consultations were bulk-billed in 2020-21.
Meanwhile, the nation’s population of those aged 65 and over is projected to more than double by 2057.
Investing in health technologies is a global trend for insurers, with Cigna in the US announcing in March an increase of $450 million to its venture fund to spend on startups and digital health, including “insights and analytics; digital health and experience; and care delivery and enablement.”