May 31, 2023

Redesign Health: A 5-Year Milestone of Innovation & Impact

Five years ago, we started Redesign Health. Since then, we’ve launched more than 50 companies and raised over $1.3 billion in capital.

During that time, a pandemic upended healthcare, and rapid developments in AI are poised to rock the industry further.

As we stand at the cusp of the next wave of change, we wanted to look back on what we’ve done so far and share where we — and the industry — are going next.

We started Redesign Health based on two observations:

Healthcare was having its internet moment. Five years ago, medical devices were becoming cloud connected, seniors were growing more digitally savvy, and the transition from fee-for-service to value-based care was accelerating. This enormous industry, which had largely resisted digital transformation for 20 years, was at last ready to change.
The cost of launching companies decreased and their early-stage value increased. The proliferation of cloud-based tools and services decreased the cost of starting a company, while the value of those companies from an early stage has been flat-to-up. The result was an enormous build vs. buy arbitrage in private markets. We saw the opportunity of a lifetime. The only catch? To take advantage of it, we had to start companies from scratch.

It was really hard at first. No one in the industry had heard of us. Our ideas were good, but underwritten mostly with desktop diligence and missing the critical lens of operators, technologists, and healthcare stakeholders. We made every mistake in the book… sometimes two or three times.

Fortunately for us, some exceptional founders bet on Redesign Health as a partner.

Five years and 50+ companies later, we can confidently say we’re one of the best at building software and services businesses for the healthcare industry. Since our inception, we’ve delivered returns for our investors that are well above industry benchmarks.

Those results are thanks to:

Our 60-person research team, which conducts 6+ months of due diligence, combining the best of hedge fund/private equity-style business model analysis with insights from our product, marketing, user research, design, and engineering teams.
Our bench of 12 venture chairs, who provide decades of operational and go-to-market experience.
Healthcare incumbents (payers, providers, and healthcare systems), investors, and founder communities, whose input drives valuable feedback loops.

And at this unique moment in time, we see a remarkable opportunity for us and our investors.

Here's why:

Fund vintages deployed during downturns have historically outperformed. Moreover, healthcare is a highly recession-resistant industry. National healthcare expenditures haven’t seen a single year-over-year decline since at least 1960.
We have conviction in our operating model — especially in a challenging market environment. The cumulative investments we’ve made in our teams, capabilities, relationships, and data confer unfair advantages on our operating companies. Our incumbent partners have strong balance sheets and greater urgency than ever to evolve their businesses, and thanks to our track record of responsible innovation, they’re eager to co-build with us.
We’re on the cusp of unprecedented acceleration driven by AI. The pace of change in the industry that inspired us 5 years ago accelerated during COVID. We can’t predict the impact of AI, but believe that it may well exceed anything our society and economy have ever seen.

It’s difficult to overstate just how dramatically this $10 trillion industry will be transformed over the coming decade. And we believe that Redesign is in an optimal position to create and capture value during this historic transformation.

With the nimbleness of a startup, the maturity of a much larger platform, the proven ability to partner effectively with industry incumbents, and a model that benefits from scale and network effects, we’re uniquely positioned to empower founders, create value for investors, and help transform the industry in service of patients.

Thank you for being part of our journey.

To stay up-to-date on our progress, follow us on LinkedIn.

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