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Kevin Ryan -- the New York-based investor and entrepreneur who first rose to prominence as CEO of the early online ad business DoubleClick -- could have launched or joined a traditional venture firm many years ago. Instead, he has launched one company after another with largely his own capital at the outset to get them going. Think Business Insider and Gilt Groupe, MongoDB and Zola.
Ryan is still at it, investing a $500 million evergreen fund with primarily personal capital through a growing team that also chips into the fund and helps him both fund startups as well as incubate them. Interestingly, despite that Ryan has no background in healthcare, more of those dollars have been moving into healthcare, too. His investment firm, AlleyCorp, has already made 20 healthcare-related bets in recent years. Now, it's carving out $100 million for a new fund to double down on the sector.
The fund, chaired by Ryan, is being led by Brenton Fargnoli, M.D., a one-time resident physician at Brigham & Women's Hospital in Boston who was able to arrange a research elective with Flatiron Health back in 2015, which brought him to New York and into the world of entrepreneurship. (Fargnoli later did double duty, working as a medical director at Flatiron and also as an attending physician at Memorial Sloan Kettering Cancer Center.)
Fargnoli is being joined by another M.D., Jeff De Flavio, a physician-entrepreneur who has launched numerous companies, including Tempest, a holistic alcohol recovery program backed by AlleyCorp, and Pearl Health, a primary care physicians group that he created inside of AlleyCorp and which just received Series A backing led by Andreessen Horowitz.
The team also includes medical students Omar Njie and Sherman Leung, as well as Jane Suh, who previously worked at Andreessen Horowitz.
We talked earlier this week with Fargnoli, who said the broad idea with the new fund is to focus on startups that are improving quality of care for patients, increasing access to care for patients and decreasing costs, writing initial checks of $1 million to $3 million.
We also talked at some length about the small but growing world of physician entrepreneurship, into which Fargnoli was himself pulled by Krishna Yeshwant, a physician, programmer, and general partner at GV who completed his own residency at Brigham and Women's Hospital, where he practiced for several years and where he apparently remains an inspiration to others. "Everyone knows Krishna," said Fargnoli.
Indeed, he said that AlleyCorp now has nine "doctorpreneurs" across its portfolio and that Ryan, just before the pandemic, organized a gathering of 100 doctor physicians at his home. "It's really part of this next generation [of healthcare] that merges the clinical with the tech," noted Fargnoli.
Certainly, AlleyCorp isn't alone in seeing a huge opportunity in healthcare and turning to physicians for help in both understanding underserved areas of their industries, as well as helping to suss out solutions. In addition to healthcare-focused funds that have for years brought doctors into the fold, generalist firms like Andreessen Horowitz have also been more aggressively hiring doctors into the firm. Among them: Vineeta Agarwala, one of a16z's newer general partners, who still sees patients. She led the firm's investment in Pearl Health, in fact.