8 VCs agree: behavioral support and remote visits make digital health a strong bet for 2021

In TechCrunch investor surveys of years past, we’ve seen a big focus on fixing what’s broken or bringing the infrastructure into the modern era. But the world has dramatically changed since the beginning of the COVID-19 pandemic.

More of us saw our doctor on video than ever before in 2020 — reaching a 300-fold increase in telehealth visits. It was the year healthcare finally moved fully into the digital space with data management solutions as well. And, though those digital visits have fallen slightly from the beginning of the pandemic, it doesn’t look like people want to go back to the way things were in the foreseeable future.

Now we’re onto the next phase where more people will be getting vaccinated, more of us will likely start to return to the office towards the end of the year, and there’s now a slew of new tech solutions to the issues 2020 presented. If you are investment-minded, as so many of our TechCrunch readers are, you will likely see a lot of potential in this space in 2021.

So we asked some of our favorite health tech VCs from The TechCrunch List where we are headed in the next year, what they’re most excited about and where they might be investing their dollars next. We asked each of them the same six questions, and each provided similar thoughts, but different approaches. Their responses have been edited for space and clarity:


Bryan Roberts and Bob Kocker, partners, Venrock

Do you see more consumer demand for digital services? How does this trend affect what you are looking to invest in for 2021?
The pandemic certainly intensified pressure on the legacy, fee-for-service, activity-based healthcare system since volumes dried up for several months. People were scared to go to the doctor and doctors who are only paid when they see patients saw their revenue evaporate overnight. Telemedicine offered some revenue salvation fee-for-service healthcare but it was impossible to do as many tests and procedures so they have by and large, since summer 2020, reverted back to in-person as much as possible for increased revenue capture.

On the other hand, value-based providers were, in the short term, more insulated as they are paid based on typical levels of utilization. Not surprisingly, COVID-19 has motivated more providers to embrace value-based care because it offers much more stable cash flows and does not depend on the tyranny of cramming more patients into the daily schedule.

With value-based care, the incentives are strongly aligned for more, and continued, tech-enabled virtual care since it is more profitable for those clinicians when they detect diseases earlier and take action to avoid hospitalizations. The beauty of virtual and tech-enabled care is that it can be delivered more frequently and group visits can be facilitated easily, with multiple specialists or people supporting a patient, to improve coordination and speed of action. Also, much more data can be brought to bear to make these interactions higher quality. Imagine how much better blood pressure is controlled when a doctor has not just the in-office reading but also all of the daily readings, or diabetic control when it is informed by all the data from a patient’s continuous glucose monitor, or post-surgical care when a surgeon can review daily pictures of the surgical site.

The enormity of the opportunity to make healthcare more productive and recession-proof growth from our aging population will attract more entrepreneurs and more capital to healthcare IT.

Digital health funding broke records in 2020, with investors pouring in over $10 billion in the first three quarters and a jump in deals overall, compared to the previous year. Do you see that trend continuing as we move back to offices and out of this pandemic or do you think this was a blip due to special circumstances?

We think growth in healthcare IT has been and will continue to be, driven by (1) better businesses and business models via aligned economic incentives and information and (2) some big wins in the space via Teladoc-Livongo merger and JD Health IPO — so both sides of the supply (great businesses) — demand (investor interest) equation. For payers, many healthcare providers and patients, it is in their interest to adopt more cost-effective approaches for care delivery and to access new data to derive insights and remove arbitrages. These prerequisites are strongly aligned in favor of more healthcare IT company formation, rapid growth and successful exits.

While people may spend more time receiving in-person HC in the future than today, we think the rapid adoption of virtual care in 2020 coupled with ever-stronger incentives for the healthcare system to emulate consumer technology usability and the never-ending imperative of improving affordability, will continue to drive demand for startups. We also think that downward cost pressures will drive demand for technology to replace fax-machine-era, labor-first administrative processes too.

What do you think are the biggest trends to look out for in the digital healthcare industry this next year, given we are likely toward the end of the year to see more workers return to the office and everyone resuming activities as they did before this pandemic hit?

We think that telehealth will become the “Intel Inside” for many of the full stack healthcare IT businesses — Medicare Advantage payers, navigation companies, virtual pharmacies, virtual primary care practices — and that patients will continue to embrace telehealth. As a result, payers will increasingly redesign how insurance benefits work to encourage every patient to start with a telehealth visit every time. In many cases, telehealth will be able to fully resolve the problem and if not, guide the patient, along with the relevant data, to the best next step in care. This will improve responsiveness and reduce costs. We do think that brick-and-mortar players will lag behind since they continue to have strong incentives for in-person care and procedures to cover their large fixed costs.

COVID-19 has also made inescapable the inadequacy of behavioral healthcare in America. We have observed this firsthand through our investment in Lyra Health, which experienced dramatic growth in 2020. We think greater access to behavioral health, better coordination of behavioral health and primary care, better use of medications and tech-enabled care for more complex behavioral health conditions are all large opportunities.

We also foresee virtual care growing in more specialty care areas as patients demand more convenient ways to access specialist expertise and value-based primary care doctors desire more rapid and cost-effective ways to co-manage patients.

How will the Biden administration possibly affect your funding strategy in the digital health field now that there’s a change of the guard?

Economic incentives to lower healthcare cost growth and the desire to use information and data to find arbitrages and insights are as aligned as ever. Remember, the law driving the adoption of new payment models is MACRA, which passed the Senate in a bipartisan 92-8 vote in 2015. This implies an uninterrupted effort to drive the adoption of value-based care in Medicare, Medicare Advantage and Medicaid. A Biden administration will also continue efforts to create more interoperable data systems and support telehealth adoption.

A Biden administration also reduces uncertainty around the permanence of the Affordable Care Act (ACA). They instead will focus their efforts on expanding coverage through enhanced subsidies to buy insurance, more marketing of ACA plans, greater support for e-broker enrollment and strong incentives for states to expand Medicaid. And we do not think Medicare for All will be seriously considered by a ~50/50 Senate, although it will likely be spoken about periodically and loudly by the far left.

What’s the biggest category in your mind for digital health this next year? Why is that?

“Technology-enabled, virtual-everything” as the initial journey in healthcare, until you need to visit a facility because in-person is necessary. In 2020, we witnessed about a decade of user adoption compressed into six months as COVID-19 made it scary, or even impossible, to access in-person healthcare. Nearly every clinician in America, and at about half of the population, conducted a virtual healthcare visit in 2020. What happened? Patients liked it. Clinicians found virtual visits useful. And going forward we think that most care will incorporate aspects of virtual care, asynchronous communication and in-person encounters only when a procedure is needed. As importantly, payers found these approaches to be more cost-effective since care was delivered more rapidly and with only the most necessary diagnostics tests ordered.

Finally, are there any rising startups in your portfolio we should keep our eyes on at TechCrunch? 

We have two portfolio companies that may be very compelling candidates:  Suki and NewCo Health.

Suki has created a virtual medical assistant that acts as a voice user interface for electronic health records, enabling a doctor to write their clinical notes, enter orders, view information and exchange data with other providers dramatically and more efficiently. They have launched primary care and specialist doctors across dozens of health systems in 2020.

NewCo Health is a startup trying to democratize access to world-class cancer outcomes. Starting initially in Asia, they are tech-enabling the diagnosis, treatment planning and care management processes for cancer patients, connecting expert clinicians to every cancer case.

Where top VCs are investing in healthcare B2B and infrastructure

Rising healthcare costs, an aging population, stifling regulations and the complexity of present-day technological offerings make the trillion-dollar healthcare industry ripe for disruption.

Not only are we finding new and innovative ways to get medical help, this global pandemic has led to explosive growth in telemedicine, digital devices and health-tracking apps — much of which needs a digital overhaul for doctors’ offices, insurance and the cumbersome HIPAA compliance.

While an infrastructure focus might not seem exciting, it is necessary to fix a broken, profit-driven system of paperwork and delays while the sick and suffering are saddled with mountains of debt.

Our current climate is the perfect illustration of just how critical new and innovative investments in the space truly are. It’s also a lucrative opportunity. According to Deloitte, healthcare infrastructure is expected to continue growing above pace into 2023.

But finding those disruptive technologies is the tricky part. In a recent survey, we asked VCs to evaluate the digital health sector; for today, we reached out to active investors to find out what they are seeing within the healthcare infrastructure landscape, what they are most interested in right now and where they think the industry is headed.

In this survey, we hear from:

Carl Byers, F-Prime Capital

Data and automation are the most interesting themes to me right now. We are only beginning to see the efficiencies and new capabilities opened up by getting the data organized and applying modern techniques. I’m more excited about the practical impact of robotic process automation (RPA) than I am enamored with AI, though both are exciting. I’d point to Notable Health in San Mateo as a company that has a great use of both technologies. I think we are about to embark on a new era of open data in healthcare where we finally solve the longstanding quest for interoperability with privacy mediated by patients. This will require a new developer ecosystem to come about built on new protocols rather than tired, legacy models. The key is for there to be demand pull from new services like virtual primary care (e.g. Firefly) or at-home solutions (like Ro or LetsGetChecked), instead of just a regulatory push (though that also will be important).

I’m spending time on RPA and open data, which is the key to improving healthcare B2B/infrastructure (see above). I think all markets have been overheated from a valuation standpoint, but if you find the right company, the opportunity is vast. If healthcare today is roughly 2x too expensive, getting data flowing is key to eliminating most of that waste. RPA can attack the administrative bloat while data exchange will allow doctors and patients to finally shop for the best value without the worry that something will be lost clinically in the translation.

YC startup Felix wants to replace antibiotics with programmable viruses

Right now the world is at war. But this is no ordinary war. It’s a fight with an organism so small we can only detect it through use of a microscope — and if we don’t stop it, it could kill millions of us in the next several decades. No, I’m not talking about COVID-19, though that organism is the one on everyone’s mind right now. I’m talking about antibiotic-resistant bacteria.

You see, more than 700,000 people died globally from bacterial infections last year — 35,000 of them in the U.S. If we do nothing, that number could grow to 10 million annually by 2050, according to a United Nations report.

The problem? Antibiotic overuse at the doctor’s office or in livestock and farming practices. We used a lot of drugs over time to kill off all the bad bacteria — but it only killed off most, not all, of the bad bacteria. And, as the famous line from Jeff Goldblum in Jurassic Park goes, “life finds a way.”

Enter Felix, a biotech startup in the latest Y Combinator batch that thinks it has a novel approach to keeping bacterial infections at bay – viruses.

Phage killing bacteria in a petri dish

It seems weird in a time of widespread concern over the corona virus to be looking at any virus in a good light but as co-founder Robert McBride explains it, Felix’s key technology allows him to target his virus to specific sites on bacteria. This not only kills off the bad bacteria but can also halt its ability to evolve and once more become resistant.

But the idea to use a virus to kill off bacteria is not necessarily new. Bacteriophages, or viruses that can “infect” bacteria, were first discovered by an English researcher in 1915 and commercialized phage therapy began in the U.S. in the 1940’s through Eli Lilly and Company. Right about then antibiotics came along and Western scientists just never seemed to explore the therapy further.

However, with too few new solutions being offered and the standard drug model not working effectively to combat the situation, McBride believes his company can put phage therapy back at the forefront.

Already Felix has tested its solution on an initial group of 10 people to demonstrate its approach.

Felix researcher helping cystic fibrosis patient Ella Balasa through phage therapy

“We can develop therapies in less time and for less money than traditional antibiotics because we are targeting orphan indications and we already know our therapy can work in humans,” McBride told TechCrunch . “We argue that our approach, which re-sensitizes bacteria to traditional antibiotics could be a first line therapy.”

Felix plans to deploy its treatment in those suffering from cystic fibrosis first as there is no cure for this disease, which tends to require a near constant stream of antibiotics to combat lung infections.

The next step will be to conduct a small clinical trial involving 30 people, then, as the scientific research and development model tends to go, a larger human trial before seeking FDA approval. But McBride hopes his viral solution will prove itself out in time to help the coming onslaught of antibiotic resistance.

“We know the antibiotic resistant challenge is large now and is only going to get worse,” McBride said. “We have an elegant technological solution to this challenge and we know our treatment can work. We want to contribute to a future in which these infections do not kill more than 10 million people a year, a future we can get excited about.”

Men’s at-home health startup Vault takes in $30 million from Tiger Global

Vault, an at-home healthcare practice specializing men’s medicine has announced the raise of $30 million in funding from Tiger Capital Group, Declaration Capital and Redesign Health to reach more potential patients and expand to more areas beyond New York, Florida, Tennessee and Texas, where it currently offers treatments.

Founder and CEO Jason Feldman, who formerly headed Amazon’s Prime Video Direct and Global Innovation teams before launching Vault last summer, told TechCrunch his startup aims to bring specialized medicine into men’s homes to give them “a better body, better sex and a better brain.”

He tells TechCrunch he started the company after noticing how many of his male friends seemed embarrassed about medical conditions or simply didn’t know they could do something about it.

Vault operates on the assumption men face certain barriers to going to the doctor for things like hormonal imbalance and erectile dysfunction. The startup tries to remove these barriers by making it easy to book at-home appointments and get a work-up with a nurse practitioner.

“I want to de-stigmatize men’s health.” Feldman told TechCrunch. “You tell a guy to go see the doctor about his heart health and he likely won’t but you tell him you’ll bring him a doctor to help his penis and it’s a different story.”

Like many new concierge medical services that have popped up in the last few years, Vault does not take insurance, instead signing patients up via membership for $133 to $300 per month, depending on the type of service you sign up for. Compare that to Forward, which caters to both men and women and offers unlimited in-office visits and testing for $149/month or Roman, a men’s “digital clinic,” which offers free online evaluations, $15 doctor’s visits and prescription medications for similar services to Vault like erectile dysfunction, hair loss and testosterone support — although Roman requires patients see a physical doctor of their choosing within the last three years before they’re able to get prescriptions via digital services.

But Feldman doesn’t think his startup is anything like what’s out there right now, claiming it as the first national men’s healthcare provider. Vault offers specialty packages like testosterone therapy or the “sex kit” for an increased sex drive or stronger erections, something that sometimes diminishes as men age.

So far, Feldman has signed up over 500 medical practitioners to come to various home locations and has hired a chief medical officer to ensure medical standards are being met. He now plans to use the new funding to open up operations in 42 cities across the U.S. and work on spreading the word to all men nationwide that Vault is here for them.

Salesforce adds new healthcare provider relationship management and analytics tools

Software giant Salesforce announced the addition of a few new tools in healthcare management to the Salesforce Health Cloud this week, with the goal being to help payers and providers utilize a more comprehensive system.

The first is a healthcare provider management feature allowing doctors and other healthcare workers a way to efficiently manage new accounts and activities from a single point.

Also included in the update is Einstein Analytics for Healthcare, which will provide pre-built dashboards and industry KPI’s to help referral managers keep track of their performance.

Destinations, the third addition from Salesforce, is a no-code healthcare interoperability solution available in Salesforce’s AppExchange program and provided in partnership with Bridge Connectors. Destinations allows healthcare organizations to integrate internal data with Salesforce’s Health Cloud without the need to write any code.

Several large healthcare organizations rely on Salesforce’s Health Cloud for provider services, including Cancer Treatment Centers of America, which serves cancer patients at treatment centers and hospitals throughout the U.S. and Piedmont Healthcare, which has 11 hospitals and serves in over 250 locations, according to its website. The ability to integrate to manage accounts, track analytics over time and integrate that data provides a way for these facilities to more efficiently do their work and treat patients in need in a more organized manner.

“All of this is part of Salesforce’s Customer 360 for Healthcare vision to empower healthcare and life sciences organizations of all sizes and types across provider, payer, pharmaceutical, and medical device companies to deliver connected, collaborative and personalized care and experiences,” notes a Salesforce release on the announcement. “With these new innovations, we’re working towards improving health outcomes and unlocking operational efficiencies by connecting people, data, and processes on a unified platform.”

VCs warn coronavirus will impact fundraising for the next 2 quarters

As of this writing, COVID-19 has killed more than 3,400 people around the globe and the coronavirus has infected tens of thousands more. But its impact has gone much further, causing major disruptions in public markets and leading corporations to pull out of conferences and delay travel. Big tech companies are asking workers to stay home and investors are now urging startups to prepare accordingly.

Sequoia Capital sent a letter to its founders on Thursday warning that the coronavirus was a “black swan” event and startups should “brace themselves for turbulence” by considering if they have enough cash and preparing to face supply chain disruptions. The letter also warned they could have a harder time fundraising, similar to the market downturns of 2001 and 2009.

The coronavirus effect is rippling throughout the tech world. Seattle, which has seen a cluster of cases, seems almost a ghost town in some parts, according to entrepreneur and former Madrona Capital partner Shauna Causey. She told TechCrunch that many of the coffee shops and co-working spaces popular among VCs have gone empty in the last week and all of her fundraising meetings are conducted via Zoom.

And already there’s some chatter that funding might be drying up for early-stage startups, though Bloomberg Beta’s Roy Bahat tells TechCrunch that startups should always be fundraising as soon as they can to protect themselves from this type of calamity.

Delivery startups set up contactless delivery options as coronavirus fears grow in U.S.

Postmates announced today it would be adding a “non-contact delivery option,” for those concerned about COVID-19 exposure from workers bringing them food. Instacart set up something similar earlier this week, announcing sales were 10x’s higher this week over last due to coronavirus concerns and rolling out the “leave it at my door” option for customers concerned about coronavirus.

This flu-like virus has already infected nearly 100,000 people worldwide, killing thousands of those with the disease, including one man so far in the Bay Area, the hub of Silicon Valley and the startup world.

Similar services starting offering this contactless option in China last month, where COVID-19 took a stronghold and started spreading from Wuhan. The majority of stores in the area had closed shop, leaving delivery as most people’s only option. The contactless measure seemed aimed at keeping everyone safe and minimizing exposure.

While plenty of customers have praised this effort, not everyone is pleased, believing this move is just passing the buck to low-wage workers.

Postmates counters this argument, telling TechCrunch the move is beneficial to both customers and couriers. “Community health and safety is paramount at Postmates, and we have shared precautionary CDC guidance with our Postmates,” a Postmates spokesperson told TechCrunch. “Customers have an option to designate the drop-off of item without contact; and will continue to encourage employees, merchants and consumers to follow preventative measures. While we are operating with business as usual, we are tracking the situation closely and will help provide the resources necessary to mitigate increased risks.”

For those who like this option and want to use it with your next Postmates order, you just order as normal. You’ll then be prompted to select your delivery preference before checking out. The option is similar with your Instacart order.

While we’ve so far only heard this option is being offered by these two delivery startups, we’re likely going to see more contactless rollouts as coronavirus fears continue to change our shopping habits in the next couple of months.

Molekule hopes to clear the air with $58 million in Series C funding and Berkeley Lab’s seal of approval

Silicon Valley air purifier startup Molekule was born out of an idea Florida University Dr. Yogi Goswami had back in the 90’s using photo-voltaic technology to kill air pollutants. His son, a young boy at the time, suffered from severe allergies and Dr. Goswami wanted to build something those like him could use in their home to clear the air. But the sleekly designed Molekule took a bit of a blow last fall when Wirecutter called it “the worst air purifier we’ve ever tested.”

Molekule has since told TechCrunch comparing its PECO technology to the more common HEPA air filter technology is like comparing apples to oranges. “Up until now, everything has been air filtration, not real air purification,” co-founder and CEO of the company Jaya Rao told TechCrunch.

To disprove the naysayers, Molekule sent off its tech for testing at the Berkeley Lab, which concluded no measurable amount of VOC’s or ozone were emitted, Molekule effectively removed harmful chemicals in the air like toluene, limonene, formaldehyde as well as ozone and that “no secondary byproducts were observed when the air cleaner was operated in the presence of a challenge VOC mixture.”

Compare that to Wirecutter’s own assessment that, “on its auto setting, which is its medium setting, the Molekule reduced 0.3-micron particulates by (in the best case) only 26.4 percent over the course of half an hour. Compare that with the 87.6 percent reduction the Coway Mighty achieved on its medium setting.” TechCrunch reached out to Wirecutter and was told it still stands by its findings and does not recommend consumers purchase a Molekule.

It should be noted Consumer Reports also tested the Molekule device and it, too, did not recommend a purchase as the unit was not “proficient at catching larger airborne particles.” However, Molekule demonstrated to other news outlets at its own facilities that the photochemical reaction in its units did break down contaminants and kill mold spores.

“To test PECO technology you actually need really sophisticated equipment,” Rao said. “Boiling it down to really simple factors is not enough because air is made up of many tiny but toxic things. These are air-born chemicals nanometers in size, which Wirecutter admittedly did not test at all for.”

Wirecutter’s Tim Heffernan disputes Molekule’s claims of superiority in the category, however. “Now they are comparing apples to oranges,” he told TechCrunch. “The claims about destroying bacteria and viruses, for example, HEPA filters capture them and they capture them permanently.”

So how’s a consumer to know what’s right? First, take into account Molekule commissioned the Berkeley Lab for their independent testing and that Wirecutter and Consumer reports ran their own independent testing. However, it might boil down to understanding the premise of the technology. HEPA filters came out of the Manhattan Project in the 40’s, when scientists needed to develop a filter suitable for removing radioactive materials from the air. It works by capturing and filtering out harmful particles, viruses and mold. However, PECO, the technology in a Molekule unit, uses the science of light to kill mold and bacteria and break down harmful particulates in the air.

Regardless of whether you want an air purifier that captures particulates or breaks them down,  Molekule has continued to move forward. The company has since launched a mini unit meant for smaller rooms and started to grow business verticals outside of the direct-to-consumer model, forging partnerships with hotels and hospitals.

It has also raised just announced a raise of $58 million in Series C funding, bringing just over $91 million to its coffers. Rao tells TechCrunch the raise was unexpected but came out of chats with Samantha Wang from RPS Ventures, which led the round.

“We feel confident in Molekule’s PECO technology, and have taken an extensive look at the science behind it. It is not only backed by decades of academic research, it has also gone through the peer-reviewed process numerous times, and has been tested and validated by third-party scientists and laboratories across the country,” Wang told TechCrunch.

Molekule also tells TechCrunch it has seen a healthy growth trajectory in the past year, despite the negative press. According to the company, Molekule has seen a 3x increase in our year over year filter subscription revenue since launch and its repeat customer growth sits at about 200%.

It’s a well-designed, though pricier air purification machine with an interesting future in the commercial space, particularly in hospitals, schools, commercial manufacturing, and hotels, as Wang points out. As long as the tech truly works.

Other participation in the round included Founder’s Circle Capital and Inventec Appliances Corp (IAC). Existing investors Foundry Group, Crosslink Capital, Uncork Capital, and TransLink Capital also participated in the financing.

Real estate startup Homie plans to expand to more cities with $23 million in Series B funding

Homie has made an impression among younger, first-time home buyers in the Utah and Arizona markets for cutting out the traditional closing costs, 6% real estate commissions and arduous paperwork associated with traditional home sales. It now plans to explore opening up in three new markets and will begin a Vegas launch in March with a fresh infusion of $23 million in Series B equity financing.

While most real estate outfits now cater to customers online, Homie takes a different approach, employing real estate agents who will help them through the process but who don’t take a commission. Instead, sellers get a $1,500 flat fee and buyers and sellers are guaranteed built-in attorney assistance for the negotiation process.

The 6% traditional commission associated with the home-buying process has been around for decades. However, it has also come under fire from the Department of Justice, which recently disagreed with a motion from the National Association of Realtors to dismiss several civil lawsuits lobbied against the organization. The move hints that the U.S. government may see these fees as archaic and unjustified as well.

How do traditional agents feel about a proposed loss of commission? Those outside of Homie TechCrunch spoke to on anonymity have said it often takes more work with less pay to close a deal this way. However, that structure seems to resonate with Homie users. Through Homie, the company claims to have saved over $55 million in commissions, with a revenue growth of 150% over the past year. This bodes well for the company, if true.

The ability to expand is also a possibly good marker for the health of the company. Homie co-founder Johnny Hanna told TechCrunch previously he’d looked at the Vegas area, as well as Dallas for expansion.

A few other places we could see Homie pop up in the next year include Boise, Seattle, Colorado Springs and Nashville.

The other new news out of Homie this year is the addition of real estate adjacent services like Homie Loans™, Homie Title™ and Homie Insurance™, all of which serve to streamline the process for customers.

“Buying or selling a home is expensive and time-consuming because of all the different companies you have to work with,” Hanna said in a statement. “Communication becomes a game of telephone because of all the parties involved. We are disrupting the traditional model and saving customers thousands of dollars by combining technology, a team of experts, and a one-stop-shop for real estate. Technology has changed everything except the real estate business model. That time has finally come.”

Utah tech magnates create new Silicon Slopes Venture Fund to boost startups in the state

Those looking outside of Silicon Valley as a potential hub for their startup might want to take a gander at Utah — at least that’s the kind of trend the new Silicon Slopes Venture Fund hopes to create.

The newly formed fund, put together by Qualtrics co-founder Ryan Smith, Omniture and Domo founder Josh James and Stance co-founder turned Pelion Venture Partners’ Jeff Kearl, pledges to invest solely in Utah-based startups. The goal? To become every bit as notable as a16z or Sequoia Capital.

Qualtrics co-founder Ryan Smith and Domo and Omniture founder Josh James onstage at the Silicon Slopes Tech Summit.

“I grew up in the Bay Area,” Kearl told TechCrunch of the energy he feels in the state. “This feels like the 1990s in the Bay Area. You can find hundreds of open jobs up and down the Wasatch Front.”

Utah has a reputation as a mostly religious, conservative and sleepy mountain region for outdoors enthusiasts but tech has fast become the leading job sector in the state, with some salaries from companies like Adobe and Qualtrics rivaling those in Silicon Valley. The state recently pledged a push to include at least one computer science course in every high school in the state by 2022 and also just hosted a massive, 25,000 person startup festival called the Silicon Slopes Tech Summit, where it held a Utah state governor’s debate and both Steve Case and Mark Zuckerberg spoke on stage.

It’s unclear how much the fund has set aside for its mission to help Utah become a full-fledged tech ecosystem rivaling Silicon Valley but one would imagine it would have a sizable sum to invest, if, as Smith tells TechCrunch, it is to help Utah’s up-and-coming startups go all the way from seed stage to IPO.

“I want to see companies get even bigger than Qualtrics…and do it in this state,” Smith said. Qualtrics sold to SAP in 2019 for $8 billion, notably the largest private enterprise software deal in tech history.

Silicon Slopes Tech Summit 2020 Gubernatorial Debate

One of the many issues tech hubs around the world face is both the networking capabilities and the ability to invest after the seed stage or Series A. Most startups throughout the globe still find the need to travel and make connections in Silicon Valley to get them through the next step of growth. This has been true for every billion-dollar startup idea in Utah as well so far. Both Smith and James took in Silicon Valley venture for their companies, as did unicorn turned public ed tech startup Pluralsight and the recently rebranded sales platform Xant (formerly InsideSales), before making it big.

However, this new fund represents the kind of push needed to create a strong innovation ecosystem in the future, as Steve Case mentioned on stage at the summit event this last week. “Venture capitalists must look at ‘what’s happening in the Silicon Slopes’ and make sure it ‘is happening other places’,” Utah newspaper Deseret News paraphrased the AOL founder as saying.

Pelion Venture Partners, which operates in both Utah and Southern California, will act as a support to Silicon Slopes Venture Fund, providing organizational overhead. Each partner will still keep their day job and donate most fees to support the ongoing operation of the non-profit tech organization, Silicon Slopes, which runs the annual tech summit of the same moniker. However, the Silicon Slopes Venture Fund will be an independent fund from Pelion, with the sole purpose of investing in deal flow the three partners find through their respective networks within the state.

“I used to hate the term ‘a rising tide lifts all boats’ because I want to be the only boat,” James told TechCrunch. “But I really think it applies here for what we are trying to do [in Utah].”