FirstMark Capital: Health Care Investor?

stethoscope1FirstMark Capital, the early-stage, New York-based venture firm, is best-known for its consumer investments, including Pinterest, the mega-successful online bulletin-board network whose newest, $225 round of funding valued the company at $3.8 billion. (FirstMark participated in its $500,000 seed fund in early 2010.)

Lesser known is FirstMark’s newer, self-imposed mandate to fund more healthcare IT companies, which its partners view as a giant opportunity that happens to be highly complementary to the firm’s existing skill set.

Not only is the health care IT market “gigantic” and the “cost curves unsustainable,” as managing director Amish Jani recently noted to me, but thanks to numerous trends — like cloud platforms that connect practitioners and patients in new ways — it has also become accessible to investors who might not have PhDs but who know their way around platform technologies.

For example, FirstMark has backed Gravie, a consumer marketplace for healthcare insurance; Greenphire, a company that makes Web-based payment software that’s marketed to the clinical trial industry; and Superior Access Insurance Services, an online insurance exchange that’s used to connect carriers with insurance agents.

Its investment in BioDigital is another example of a health care company that FirstMark seems well-suited to help. The 11-year-old medical visualization firm already develops 3D animations of the human anatomy for drug makers and medical device makers; with the help of FirstMark — which led a $4 million Series A round for the company in September — BioDigital is working toward new, freemium models, too, including with consumer Web companies that want to augment their content with its technology.

Still, not everyone thinks the strategy of FirstMark — or other Internet investors like Social+Capital Partnership that are suddenly focusing more on healthcare IT — makes sense. Bijan Salehizadeh, for one, a longtime PhD and managing director at NaviMed Capital in Washington, D.C., recently wrote a thoughtful piece about how easy it is to underestimate the complexities of healthcare investing, not least because healthcare is a “slow-to-evolve industry with powerful and durable relationships.”

Domain expertise matters, Salehizadeh had argued.

Maybe so. Then again, the right health care investment could reframe the way that FirstMark is viewed by entrepreneurs and investors alike. As Pinterest illustrates, sometimes it takes just one savvy bet to change everything.

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