Waterloo Region’s vibrant medtech sector is getting a well-deserved shot in the arm.
Velocity, with support from Communitech, has rolled out a new pre-seed fund for health-focused technology companies called the Velocity HealthTech Fund.
And it has already assisted its first startups.
Announced Thursday evening at the Velocity Fund Pitch Competition, the Velocity HealthTech Fund is a micro-VC dedicated to the support of early-stage medtech startups. It will make investments of $50,000 to support entrepreneurs working to deliver medical devices, diagnostic tools, new therapies and digital health initiatives.
“More early-stage investment is required to fuel our thriving health tech startup scene,” said Dave Caputo, past chair of Communitech as well as an early advocate and investor of the Velocity HealthTech Fund. “Combined with the benefits of Velocity’s highly differentiated startup resources and Communitech’s scale-up programs, we’re on pace to create high impact global health tech juggernauts right here [in Waterloo Region],” Caputo said.
To that end, two companies were recipients of money from the new fund at Thursday’s pitch competition, the 26th version of which was held at Catalyst137 and featured companies pitching for money from Velocity’s existing micro-VC fund as well as the new health-tech fund.
Toronto-based Life Sciences Key Technologies, which is working to decentralize health-care diagnostic testing, earned $100,000, the largest ever for a Velocity Fund recipient, with half the money coming from the Velocity Health Tech Fund.
And Toronto’s Caribou, which has pivoted from helping people with hair restoration to coordinating personalized medical travel experiences, earned $50,000 from the new medical fund.
A total of $300,000 was invested by Velocity in five companies Thursday.
More than 130 health-based technology companies now operate in Waterloo Region, 75 of which are fast-growing startups and scale-ups.
Velocity, the University of Waterloo’s successful startup incubator, currently supports 27 medtech startups. Six years ago, there were just a couple.
“The rise in health technology companies incubating at Velocity reflects an increasing number of founders wanting to dedicate their energy and passion to simultaneously capture not only revenue from a multi-trillion dollar market, but also an opportunity to improve longevity and manage or cure disease,” says Adrien Côté, Velocity’s new Executive Director. “As our world faces growing, and already massive, challenges in human health, the commercialization of health technologies will be essential. Simply put, it’s good business.”
The health fund is already 80 per cent subscribed on its US$1-million initial target, with participation from medical professionals in Waterloo Region and the surrounding area.
“I invested in this fund early because I believe in the impact that startups can have in our health-care system, and I am passionate about health,” said Dr. Richard Weinstein, an ophthalmologist based in Kitchener. “Because my ability to holistically judge the business potential of health-tech startups is limited, this kind of fund provides me with a more straightforward, vetted way to invest in the sector.”
Companies will be able to access the fund via Velocity’s existing Velocity Fund Pitch Competition, which runs three times a year.
“With the amount of health-focused technology research and development being done right here in Waterloo Region, there was a clear need for a pre-seed fund that would help early-stage med-tech companies start, grow and succeed,” said Iain Klugman, CEO and President of Communitech. “Together with our partners at Velocity, we are proud to support the impactful work being done to improve healthcare systems across Canada and throughout the world.”