City Corridor Ventures’ Andy Slavitt
Star Tribune by way of Getty Photographs
Andy Slavitt’s City Corridor Ventures has been investing in healthcare improvements targeted on low-income and weak communities. With new funding from buyers that embody John Doerr, it now has whole belongings of $1.4 billion.
When Andy Slavitt left authorities, he wished to show that you may use expertise to enhance healthcare for underserved and low-income communities—and nonetheless make a revenue. The previous performing administrator of the Facilities for Medicare & Medicaid Companies and overseer of the profitable turnaround of healthcare.gov, arrange healthcare-focused VC agency City Corridor Ventures in the summertime of 2018 to do exactly that.
“I’ve obtained a little bit little bit of a chip on my shoulder,” he instructed Forbes. “If [investors] assume you might be impression, they’ll put you on this bucket—individuals who do good issues and perhaps some good household workplace needs to put money into you as a result of they’ve obtained an impression mandate. I’ve at all times resisted that.”
Since its launch seven years in the past, City Corridor Ventures has invested in 35 corporations and began seven others, together with kidney care specialist Try and Suvida, which gives main care targeted on Hispanic seniors and their households. Its first fund posted top-decile efficiency, with a internet inner fee of return from its July 2018 inception (through June 30) of 33% versus 12% for the median VC fund. A complete of 10 of its bets surpassed a billion-dollar valuation, together with CityBlock Well being, a healthcare supplier targeted on low-income communities that was one in every of its preliminary investments and has since reached a valuation of $8 billion; SignifyHealth, a supplier of tech-enabled at-home threat evaluation acquired by CVS for $8 billion in 2023; and Landmark Well being, a startup providing in-home medical care to sufferers with persistent circumstances bought by Optum Well being for $3.5 billion in 2021.
Buoyed by that monitor file, City Corridor Ventures instructed Forbes it has now raised $440 million for a fourth fund, bringing its whole belongings below administration to $1.4 billion. Whereas the New York-based agency, whose common companions encompass Slavitt, David Whelan and Meera Mani, stays small in comparison with enterprise capital giants like Andreessen Horowitz, Basic Catalyst or Sequoia, every of which has tens of billions in belongings below administration, it’s a well-regarded participant in healthcare.
John Doerr, chairman of Kleiner Perkins, has been a big private investor in City Corridor Ventures since its inception and has re-upped for each fund since, together with the brand new one. “I believed in what they stated they have been going to show to do,” Doerr stated. “I believe the healthcare trade has not been nicely served by the tech trade till now. They’re a difficult buyer and conservative institutionally. I see that altering on this second.”
“It was very simple to explain the issue. It was very completely different to say capital and entrepreneurship and innovation is likely one of the cures.”
Slavitt, 58, who earlier than his stint in authorities labored as an govt at Optum Group, believes that expertise can fill lots of the gaps in healthcare in low-income and underserved populations. Enterprise funds have traditionally shied away from investing in these populations as a result of revenue margins from Medicaid are razor-thin and sufferers face further social issues, from lack of housing to low-quality meals choices, that make their remedy extra complicated.
“It was very simple to explain the issue,” Slavitt stated. “It was very completely different to say capital and entrepreneurship and innovation is likely one of the cures. It’s one of many issues we’re good at on this nation, so why not lean into it?”
In 2023, City Corridor Ventures invested in Marble Well being, which gives digital behavioral take care of teenagers, targeted on group remedy. Accomplice Mani calls the corporate’s founders, who got here from remedy startup Headway, “relentless and ruthless” of their execution, a necessity for a corporation that accepts Medicaid insurance coverage for psychological well being. In 2024, City Corridor launched Habitat Well being, which helps older adults in low-income communities handle their well being in their very own properties, in partnership with Kaiser Permanente. That agency started serving older adults, lots of whom are dual-qualified on Medicare and Medicaid, in Sacramento and Los Angeles this yr. “Certainly one of City Corridor’s superpowers is the mix of mission and monitor file,” Whelan stated.
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That mixture has additionally satisfied entrepreneurs of the agency’s worth. In 2023, it co-led an funding in Thyme Care, a Nashville-based startup that helps sufferers navigate most cancers care, with assist from AI to automate documentation and synthesize complicated affected person information. On the time, Thyme met 110 potential buyers, then whittled the contenders down to 5, recalled cofounder and CEO Robin Shah. Even supposing City Corridor’s bid valued the enterprise at $20 million lower than its $150 million high provide on the time, Shah satisfied his board and present buyers to decide on them. Immediately, the corporate is value $1.1 billion. “I don’t know if we’d be there with out City Corridor,” he stated, noting the companions’ healthcare experience and connections.
Slavitt had been a strong critic of President Trump during his first term, however this time he has turn into shut with Dr. Mehmet Oz, and earlier this yr was named cochair of the Well being Care Fee Studying and Motion Community, a public-private partnership to speed up the well being system’s transition from fee-for-service to various cost fashions, similar to value-based care, by which suppliers are paid primarily based on affected person outcomes somewhat than the variety of visits or procedures. “With each administration, there’s going to be good issues that occur and challenges that occur,” he stated. “The great issues on this case is that it is going to be extra targeted on innovation and information fluidity and being front-footed on AI and extra targeted on prevention and wellness as that matches into the MAHA theme.”
Whereas the non-public sector gained’t have the ability to fill the gaps for the millions of additional uninsured people created by the “One Big Beautiful Bill Act,” private-sector technological innovation will help be sure that individuals don’t lose protection as a result of administrative burden of displaying they qualify, he stated. Expertise “doesn’t shut the hole,” he stated. “I can’t lie and say that it does, nevertheless it’s going to assist individuals.”
With the brand new funds, Slavitt stated that City Corridor can proceed to put money into discovering—and scaling—tech-enabled options to healthcare’s many issues. Among the many areas of curiosity: house take care of aged adults, pharmacy and prescription drug administration, and first care. “These are actually huge markets and actually huge alternatives,” Slavitt stated. In any one in every of these areas, “in case you can remedy the issue nicely, you’ll be able to construct an awfully huge enterprise.”
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