It might not seem an obvious leap for a Canada-listed telecoms company to hire a heathcare venture capitalist to run its corporate venturing unit but it is a move that has paid off handsomely so far.
In February 2016, Richard Osborn left his managing director role at healthcare investment fund RecapHealth Ventures for a similar role at Telus Ventures, effectively succeeding the unit’s founder, Mathew George.
Osborn has been managing director of health and wellness-focused investment fund RecapHealth Ventures since it was founded in 2010, before which he was a partner at private equity firm Second City Capital Partners.
And this has been an area he has helped Telus Ventures push into. Telus Ventures invests in six primary areas – healthcare IT, internet of things, big data, fintech, digital security and identity. Osborn said: “While most of those areas might be considered fairly standard areas of interest for our peer group, our healthcare focus is unique. With a deep commitment to helping improve Canada’s healthcare system and as the largest health technology vendor in Canada, the division of Telus known as Telus Health has, with the active support of Telus Ventures, acquired, developed and partnered to create a suite of complementary technologies serving healthcare professionals and patients across the country.
“I think we are close to a tipping point, where the increasing accessibility and portability of data in areas such as healthcare is very exciting and where I think an especially high number of interesting opportunities will present themselves in the next 12 to 36 months.”
Earlier, Osborn co-founded venture capital fund Greenstone Venture Partners in 1998 and non-profit investment organisation Social Venture Partners in 2001.
As an experienced venture investor, he has two of the most powerful attributes required – experience in deal-making across a wide sweep of disruptive technologies and a strong network. This has helped deliver exits, such as this year’s sale of US-based cybersecurity technology provider Zenedge to Oracle for an undisclosed size.
In an interview with GCV published in September, Osborn said: “It is no secret to the readers of GCV that the importance of corporate innovation is increasing and that corporate venture funds drive deeper and more productive engagement in the entrepreneurial ecosystem. Our investment thesis is that our organisation can perform better over the long run if we find, fund and support high-potential innovations. We need to do our job well to help our organisation defend core markets, pursue new ones and have capital-efficient ways of learning about game-changing technologies. Specifically Telus Ventures drives investments that span the spectrum from tactical opportunities, where the focus is to drive short-term product development or revenue targets, to those that provide less immediate financial return but contain longer-term compelling insight or market value to Telus.
“Our team supports investee companies through our internal innovation programs where we assemble sector-specific portfolios in conjunction with proven entrepreneurs, initiatives we call catalysts, co-investor syndicates made up of global telecoms partners, a talent Bench made up of Telus team members of all levels that work with our portfolio and numerous other approaches that are a departure from more traditional models. We do this to drive value to Telus obviously, but we also believe it helps the companies to be more successful.
We measure ourselves constantly in how this activity is translating directly to value for our portfolio. We do this by having close relationships with our investees as well as regular polling of our portfolio.
“The Telus Bench is a program we designed to give our investees the opportunity to work directly with, and exchange ideas and expertise with, thought leaders across our organisation. We have a team of Telus people who support portfolio companies as resources, sounding boards, advisers and, in some cases, board members with skillsets matched to the current needs of the company.
“Over the past year, we have accelerated efforts in this realm. In particular we have established a significant partner network designed to serve entrepreneurs and support them in bringing their vision to fruition. These include deep relationships with leading Canadian and US-based incubators and accelerators, financial and distribution partners, including a global consortium of other telecoms companies with CVC arms where we might jointly co-invest and sign distribution agreements covering multiple countries and regions.
Telus Ventures also assists entrepreneurs prior to a potential investment through internally developed programs such as FirstStep, a guided market exploration process where companies spend six to eight hours working with Telus innovation experts to develop holistic roadmaps to determine where technology and market developments are most likely to impact their company.
Innovation centres in our Telus offices in Vancouver, Toronto and Montreal have leading-edge living labs with the latest technology tools where we regularly host open houses for entrepreneurs and executives to take part in thought leadership discussions, hackathons and exploration sessions.
“Telus Ventures was founded 16 years ago and we have traditionally been very quiet about our activities and accomplishments. It must be that we are Canadian. In that time, we have made over 60 investments and had some great successes, both from a strategic impact to Telus corporate but also from an IRR [internal rate of return, a form of annual performance measurement] perspective as well. Not surprisingly, we have also learned some lessons.
“In some sense our role has not and will not change – namely to be on the front lines in Telus’s interactions with the entrepreneurial ecosystem. What has changed since we brought in a new team a little over a year ago is how we are going about it. While in the past we were focused on more traditional corporate venture capital investments, we are now pushing the envelope in such areas as catalyst initiatives – which I mentioned – through our carrier-focused global syndication deals, in leading social impact investments in areas such as healthcare, through market force design workshops called First Step, as well as several other forms of activity that we believe are important. We are also taking a much harder look at ensuring we internally leverage the portfolio company’s expertise and approach to problem-solving.”
He has also moved to expand the ventures unit’s connections inside and outside Telus through hosting its second ventures day in Toronto last month. More than 200 people attended the summit.
Telus appears ubiquitous as a phone operator, alongside peers Bell Canada and Rogers, which has refocused its ventures activity back into Canada and effectively shuttered its Silicon Valley team under Paul Sestili, but, under Paul Lepage, Telus Health is a powerful provider of healthcare technology connecting doctors and healthcare practitioners to one another and to their patients.
Lepage is chairman of Telus Ventures and was instrumental in hiring Osborn.
From an impressive base, therefore, Osborn has quickly made his mark in a company that, almost uniquely among Canadian corporations, has taken venturing seriously.
For last year’s GCV Powerlist, Darren Entwistle, president and CEO at Telus, said: “Telus Ventures has played a critical role in ensuring we embrace innovation opportunities that advance our country’s digital economy and Telus’s leading performance.”