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OurCrowd Launches $200 Million Investment Fund Focused on Health - eJewish Philanthropy

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OurCrowd, the Jerusalem-based startup investment firm, is launching a $200 million investment fund dedicated to boosting global health stocks.

The fund, announced Monday at the Clinton Global Initiative meeting in New York City, is OurCrowd’s largest single impact investment project to date. It is organized jointly with the World Health Organization Foundation, which directs charitable funds to help achieve the goals of the World Health Organization.

The fund focuses on advanced technologies that will not only offer new products and services in therapeutic diagnostics, vaccines, digital health, and all things classic, but also address the underlying causes that affect health, John Medved, founder and CEO of OurCrowd, told eJewishPhilanthropy. “We are dealing with a crisis in health, climate and food and many solutions will come from startups.”

Impact investing was a topic that surfaced throughout the morning of the first day of the two-day Clinton Global Initiative meeting, which is taking place for the first time since 2016 and is being held on the sidelines of the United Nations General Assembly. Huge banners at the conference urged attendees – including prime ministers, corporate CEOs and heads of large nonprofit organizations – to “commit to action.” Equality in global health was among the challenges former President Bill Clinton outlined in his inaugural address, along with climate change and the ongoing recovery from the pandemic.

“The COVID-19 pandemic has torn the lid off many long-standing health inequalities across borders,” Clinton said in the letter. “And even though we haven’t beaten it yet, we’re getting there.”

OurCrowd’s Global Health Equity Fund will invest in approximately 25 to 30 early-stage startups focused on healthcare innovation, as well as agriculture and energy. In order to ensure that technology reaches low- and middle-income countries, the fund will come with an “access pledge” in which companies pledge to do their best to make their products available outside the developed world.

There is a direct charitable component as well. One-third of the profits generated by the fund – plus one-third of the management fees – will be donated to the WHO Foundation. The institution will also have an observer in the investment committee of the fund.

“I think the idea of ​​making it easier for people to invest and donate in the same work is something new,” Medved said.

Undertaking to access the fund will not require the respective companies to meet minimum standards or criteria; Medved believes that if this pledge is too difficult to fulfill, companies may be reluctant to take on the investment. But he does not see the pledge as empty words. He said that trust is inherent in the investment process, and keeping one’s promises to investors is part of that.

“It’s not a meaningless pledge, it’s a real one,” Medved said. “This is an all-encompassing business, and if you have people who are not directly with you, who make commitments that they don’t stick to, you’re going to have more serious problems. We don’t invest once — we invest once and twice, and some of our companies invest in six or seven times.”

The Global Health Equity Fund is the first major impact investment project of the World Health Organization Foundation, a Switzerland-based non-profit organization established in May 2020 during the early months of the COVID-19 pandemic. Geetha Tarmaratnam, the foundation’s chief impact investment officer, told eJP that an increasing number of investors are willing to make ethical choices, and that technologies that have the potential to make large-scale change need capital in order to reach their potential customers.

“There is a huge challenge in terms of trying to scale up existing infrastructure and existing systems, and we need to focus on the most cost-effective solutions, and innovation is part of that,” she told eJP. “Success is not just growing them from where they are now to two or three times [where] They are now… It’s really about making them 100 times bigger than they are now and for that they need to be financially successful.”

OurCrowd has previously invested in companies with a social impact, from Alpha Tau, a radiotherapy startup, to Beyond Meat, whose plant-based meat emits far fewer carbon emissions than actual beef. But Medved sees this fund as a decade-long initiative, and hopes it won’t be OurCrowd’s last coordinated impact investment effort.

Tharmaratnam also hopes that such funds will also lead companies to think about social impact from the moment they are founded, not just after their success.

“The more traditional way of building a business and especially scaling a business is to try to grow these businesses to be commercially successful and then after they become very big, to try to make them more mindful of their resources,” she said. “We don’t have time for that. This life is too long.”