Heritage Group Closes Second Healthcare Innovation Fund at $220 Million

Backed by 15 Leading National Healthcare Companies, Utilizes Strategic Model of Venture Capital to Address Industry’s Greatest Challenges

NASHVILLE, Tenn.--()--Heritage Group announced today the official closing of its latest Healthcare Innovation Fund at $220 million, exceeding its original fund target by $20 million and exceeding its prior Healthcare Innovation Fund by more than $50 million.

Backed by 15 of the nation’s leading healthcare companies, Heritage invests in innovative companies focused on building solutions to the most pressing challenges in healthcare. Heritage’s unique model allows its strategic investors to actively engage in the identification, evaluation, and subsequent growth of some of the most promising solutions in healthcare.

“We’re delighted by the ongoing support of our existing investors, and we’re excited to have welcomed several new strategic investors to Heritage,” said Paul Wallace, Managing Director at Heritage Group. “In this era of unprecedented change in healthcare, we’re proud to continue to provide our partners with significant financial returns, along with the opportunity to engage deeply in addressing critical problems in the healthcare industry.”

Blue-Chip Healthcare Investors

Heritage investors represent national leaders in the payer, provider, IT, and service sectors of healthcare. This diversity is particularly valuable as these sectors begin to converge in the shift towards value-based care. Limited Partners include: Adventist Health System (Florida); Amedisys (Louisiana); Cardinal Health (Ohio); Cerner Corp. (Missouri); Community Health Systems (Tennessee); Health Care Service Corporation (Illinois); Horizon Healthcare Services (New Jersey); Intermountain Healthcare (Utah); LifePoint Health (Tennessee); Memorial Hermann Health System (Texas); Sutter Health (California); Tenet Health (Texas); Trinity Health (Michigan); and UnityPoint Health (Iowa).

These strategic investors operate more than 550 hospitals with 90,000 beds, and employ approximately 600,000 people. They cover more than 20 million lives under a number of leading health plans, deliver pharmaceuticals and medical products to more than 100,000 locations daily, and generate revenues of almost $300 billion.

“Beyond a solid performance record, Heritage Group has brought together some of the leading health systems and executives in our industry,” said Donald Trigg, President of Cerner Health Ventures. “At a time of dynamic change, we are constantly looking to align with our health system clients to advance their business strategies. We view Heritage as a compelling opportunity to advance that approach.”

Unique Model of Venture Capital Investing

“The structure and processes at Heritage have provided us with a unique opportunity to lend our expertise and help change our industry for the better,” said Dennis Laraway, Chief Financial Officer at Memorial Hermann. “Heritage has done a great job of working with our executives to identify areas of need and innovation with solution-oriented companies. We’re currently working with several portfolio companies as a result of this model.”

Sharecare, a digital health and wellness engagement platform that became part of the Heritage portfolio in 2013, has grown rapidly since Heritage’s investment.

“We were very pleased to receive an investment from Heritage Group and for the strategic engagement thereafter, which has led to partnerships with several of the Fund’s Limited Partners,” said Jeff Arnold, CEO at Sharecare.

In conjunction with the investment from Heritage, Sharecare quickly secured contracts with several Limited Partners, including Trinity Health, which has started the process of rolling out Sharecare’s solution system-wide.

“Strategic partnerships and innovation are important to Trinity Health, because they help us find new ways to transform our system and become even more people-centered,” said Scott Nordlund, executive vice president, Growth, Strategy and Innovation for Trinity Health. “As a Heritage Group investor and a user of innovative technologies and ideas like Sharecare, we are continuously advancing our operational and clinical processes in ways that benefit the people and communities we serve.”

Data analytics company Explorys is another example of Heritage creating both financial and strategic value. With the assistance of its strategic investors, Heritage was able to identify and evaluate Explorys, leading to an investment in 2012. Explorys subsequently secured enterprise contracts with two Heritage Limited Partners, dramatically increasing revenue. Last year, Explorys was acquired by IBM to complement and strengthen its Watson Health Cloud platform.

“Our partnership with Heritage was a critical component of the growth and success that ultimately led to our acquisition,” said Steve McHale, CEO of Explorys.

Three Decades of Success and Innovation

Founded in 1986, Heritage Group is a Nashville-based, private investment firm. Managing Directors Rock Morphis, David McClellan, and Paul Wallace each have significant operating experience leading high-growth healthcare companies. This authentic, real-world experience gives Heritage Group a unique ability to understand and advise growing companies. In addition, the partners have collectively invested more than $1 billion in more than 100 companies during the past thirty years.

“We take great pride in investing in disruptive companies led by talented and visionary entrepreneurs,” said Morphis. “As we begin our fourth decade in the healthcare industry, we hope to continue our history of building successful companies by providing essential growth capital and the benefits of our strategic platform.”

About Heritage Group
Heritage Group is a Nashville-based, healthcare-exclusive, venture capital firm with more than 30 years of experience financing and operating healthcare companies at all stages. With $400 million under management, Heritage provides capital and unique growth opportunities to businesses that improve the delivery of healthcare services. The firm’s strategic partners operate more than 550 hospitals with 90,000 beds and employ approximately 600,000 people. They cover more than 20 million lives under a number of leading health plans, deliver pharmaceuticals and medical products to more than 100,000 locations daily and generate revenues of almost $300 billion. For more information, visit HeritageGroupUSA.com.


Jarrard Phillips Cate & Hancock, Inc.
Alissa Krinsky, 312-419-0575


Jarrard Phillips Cate & Hancock, Inc.
Alissa Krinsky, 312-419-0575