| SAN FRANCISCO
SAN FRANCISCO Aug 20 What do Dropbox, Stripe,
Airbnb and Reddit have in common? These technology firms all
received mentorship and money from Silicon Valley's so-called
startup machine, Y Combinator.
Now, for the first time in its nine-year history, the
accelerator program is actively recruiting health-technology
startups. To attract top talent in healthcare and biotech, Y
Combinator recently tapped medical executive Elizabeth Iorns as
a part-time partner.
Sam Altman, Y Combinator's president, told Reuters he
expects to see a growing number of venture capitalists investing
in early-stage biotech and digital health companies.
"When we move into a new area, the venture capitalists
usually don't like it," he said. "It takes them a couple years
to come around."
But increasingly, Silicon Valley is opening its checkbook to
health startups. Digital health, a particularly trendy area that
includes wearable technology and electronic health records,
received $1.9 billion in 2013, a 39 percent jump from the
previous year, according to data collected by venture fund Rock
Y Combinator's interest in health-tech echoes some of the
largest technology firms - Google, Apple and Samsung. Similarly
to these firms, Y Combinator is hoping to corner a sliver of the
American healthcare market, which accounts for an estimated 20
percent of U.S. gross domestic product.
"It's the right time for us to try health care," Altman
said, as the "cost and cycle time" have dramatically decreased
in recent years.
About a dozen health startups showcased their products and
services to a roomful of press and venture capitalists at Y
Combinator's demo day. This marked the largest number of
health-related startups in Y Combinator's history, Altman said.
The companies that presented on Tuesday included The Immunity
Project, which is developing an HIV vaccine, and Boston-based
Gingko Bioworks, which is working on a project to treat
Other digital health funds, including Rock Health, say they
hope Y Combinator's interest in the space will open the
floodgates to new sources of funding.
Y Combinator offers funding and advice, in exchange for
about 6 percent of each startup's equity. It was founded by Paul
Graham, a notable programmer and venture capitalist.
(Reporting by Christina Farr; Editing by Leslie Adler)