The Social Venture Fund, in collaboration with the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the University of Michigan’s Stephen M. Ross School of Business, today announced that it has participated in the Series Seed B convertible note round for Conversa Health, a rapidly growing San Rafael Calif.-based patient engagement company. The Social Venture Fund was part of a syndicate of early-stage health care investors.

The Social Venture Fund, the nation’s first student-led impact investing fund, invests in and supports innovative, for-profit companies that place social and environmental impact at the heart of their business models. The Fund is managed by a team of approximately 40 MBA and BBA students – many of whom are pursuing dual-degrees with education, environment, health, law and public policy – along with faculty advisor Uday Rajan, the chair of the finance department at the Ross School of Business. The Fund, which has seven active investments, focuses in four key industry verticals: health care, education, food systems and environment and urban revitalization. In addition to the dollar investments it makes, the Social Venture Fund conducts consulting projects for its portfolio companies, from market sizings and pricing analyses to financial models and pitch materials to support companies’ future business development and fundraising needs.

“Investing in companies with a purpose is an increasingly important mandate both for our students and for the investing world as a whole,” said Stewart Thornhill, executive director of the Zell Lurie Institute. “The Social Venture Fund has done a great job choosing a company that has good prospects for a strong exit as well as the potential to change the way our health care system interfaces with patients for the better.”

Conversa Health, the Fund’s first direct investment in the health care space, aims to improve patient engagement, adherence and health outcomes through a software as a service (SaaS) platform that provides hospital systems with an automated way to bridge the gap in communication that occurs between visits. Conversa’s main product, “Digital Checkups,” uses data-driven algorithms to generate personalized clinical questions, patient education, reminders and alerts triggered by a rich profile of each patient, including data from Electronic Health Records (EHR), biometric monitoring devices (i.e., wearables, glucometers) and Patient Generated Health Data (PGHD) derived from Digital Checkup responses. This information is analyzed and fed back into the EHR and other care management systems to alert the care team about patients that are in need of guidance, support and intervention.

A team of seven students, led by Christine Priori, MBA/MPH ’17, sourced the deal and conducted in-depth due diligence on the company. The Fund’s rigorous deal sourcing process began with screening nearly 160 companies that submitted applications and narrowing the pool to five companies that would undergo the three-month due diligence process. For Conversa, this process included analyzing the company’s management team, its product’s effectiveness and market potential, its financials and revenue model and its potential to create positive social impact. The team interviewed numerous industry experts, including leaders in the patient engagement space, the Fund’s health care advisors and key thought leaders and purchasers at large hospital systems.

“I am continuously impressed by the intelligence and dedication of my fellow fund members as they diligently researched and clearly articulated the possibility of investing in this company and industry,” said Priori. “Leading this due diligence team has accelerated the refinement of both my analytical and leadership skills, while cementing my interest in social impact and corporate responsibility.”

The team determined Conversa would be a strong investment for the Fund due to the company’s potential to enhance the way health care is provided. “We believe in the product’s ability to improve patient adherence, serve as a conduit to foster communication between patients and their doctors and ultimately improve patients’ health outcomes,” said Logan Pitts, BBA ’16, a member of the due diligence team. “We also have great confidence in the caliber and experience of the entire management team and the company’s traction with thought-leading providers and health IT distributors. Finally, the management team’s deep-seated interest in developing a continued, working relationship with the Social Venture Fund is a very important factor in arriving to our decision.”

“We are impressed with the thoughtful and rigorous due diligence process the Social Venture Fund went through,” said West Shell, co-founder and CEO, Conversa Health. “We are delighted to have them on our team to help work on business building and research projects that will drive Conversa’s innovation and social value impact.”

 

Source: University of Michigan’s Social Venture Fund Invests in Conversa Health