The goal of any venture capital executive is to return their entire fund from one deal, and Jack Young achieved just this with the Fitbit flotation last summer. Fresh from this success, Young is now walking the world stage as a health technology investor, rubbing shoulders with luminaries such as Craig Venter, one of the first people to sequence the human genome, who spoke at Qualcomm Ventures’ annual CEO summit shortly after the IPO.
A snazzy dresser, known in the Qualcomm Ventures team for his trendy clothes, Young is the head of Qualcomm Ventures’ $100m Life Fund. Qualcomm Ventures was one of the investors in a $43m round for Fitbit in 2013. Fitbit raised $841.2m in June’s IPO last year.
Young said: “Fitbit’s remarkable growth is a demonstration of strong consumer interests in digital health and wearable products. Venture investors who believed in the company were rewarded handsomely, thanks to the founders and management team who have been vigilant in capital management while building an exceptional brand and solid business. The success of the Fitbit IPO is a boon to digital health that is likely to attract more talents and investments to the field.”
Young has also further led Qualcomm Ventures’ experimentation in digital health, by launching DRX Capital alongside pharmaceutical company Novartis, a joint $100m fund. DRX Capital won best newcomer and fund of the year in our Global Corporate Venturing Awards ceremony, also in June last year.
The hope is the partnership will be in the vanguard of the exploration of digital medicine. In the past, venture investments in digital health have been largely focused on areas besides pharmaceuticals. Young said of DRX Capital: “We have made great progress with the new fund, which has allowed us to expand our investment horizon by using Novartis’ domain knowledge and network. Two new investments, behavioural medicine company Omada Health and clinical research company Science 37, have already been announced. A healthy pipeline is well under way.”
He added: “DRX Capital is an investment vehicle which allows us to explore and accelerate products and services not limited just to the two founding company’s immediate commercial interests – mobile and biotech – but to serve the greater pharma industry at large by accelerating digital development. We have received a large volume of inbound interest, and are planning to potentially bring on additional industry investment partners in our next phase.”
The Qualcomm Life Fund is an investor in heart monitoring company AliveCor, mobile technology company Airstrip technologies, fertility monitor company Cambridge Temperature Concepts, home care company ClearCare, software as a service clinical research company GoBalto, fitness company Noom Wellness Intelligence, medical device manufacturer Sotera Wireless, machine-to-machine company Telcare, and social health management company Welltok.
Young joined Qualcomm Ventures in 2008. Before this, he worked in various roles at technology companies ZTE, Nokia, Amber Networks, 3Com, GDC and Nortel Networks. He has an MBA from McGill University.
Young said corporate venturing had some advantages over traditional venture capital. Young said: “Having worked in Silicon Valley as part of a successful venture-backed startup building as well as trying my hands as an angel investor, I concluded that a role in corporate venture capital (CVC) might be a better fit for my skills and intellectual curiosity.
“In recent years, the venture industry has bifurcated into a dumbbell-shape with super-sized multistage funds on one end and over-sized angel funds on the other. If you don’t participate in either, you will have a hard time finding high quality deals or have to resort to taking higher risk. CVC, if structured correctly and considering its strategic, value-add implications, can play in this middle ground.
“Qualcomm, specifically, is a clear leader in the mobile industry, and has a well-established venture practice that is valued by entrepreneurs and other investors alike. Considering my background and desire to explore a variety of technologies and stages, I thought of Qualcomm Ventures as the best place for me to switch into a full-time investment role.“
It has been a busy time for Young investing in the growth of the digital health sector. Young said: “Since the launch of the Qualcomm Life Fund in 2011, we have completed 12 investments in the digital health space.
“The whole digital space has attracted a fair amount of attention. Investments reached more than $4bn in 2014. Our investment strategy has been focused on looking for innovative, impactful and category-leading companies across various sub-verticals. All of our companies are making great progress with the shared goal of improving our healthcare quality and reducing cost and waste. We have had two exits, as at November, out of our portfolio, including the IPO of Fitbit.”
He added, however, that Qualcomm Ventures was starting to face much greater competition for deals in the sector. Young said: “While we enjoyed early success in attracting quality companies, as the digital health space matures, just about every major venture firm has started to invest in this sector. We have started to see heavy competition in terms of getting into rounds, as well as frothy valuations due to that factor. Unfortunately, unlike consumer or enterprise-focused products, healthcare is a complicated system with many adoption hurdles to overcome. It nearly always takes more time and capital to build a successful business in this space.”
Young added: “The venture capital industry is becoming increasingly sophisticated and competitive. Many major firms are retooling their businesses by offering value-added services that run the gamut from project design to executive recruiting. CVC needs to dig deeper to bring its own set of unique assets to the table, while not pursuing deals for short-term commercial interests. Equally as important, CVCs probably need to follow the VC industry norms to attract and retain their own talented investors by better aligning economics and compensation.”
Young also varied professional interests and hobbies. Young added: “Before turning into a CVC investor, I tried my hand at many things. Earlier in my career, I was interested in marketing so I worked in marketing and product management. After participating on the front lines with direct customer engagement, I took on increased leadership in directing sales and progressed into a general manager role running a group with a profit and loss responsibility.
“In switching into CVC, I thought I was well prepared for the job, but like anyone who has made the switch from a long-time operator to investor, I made early mistakes and learned some valuable lessons. Thankfully, I was surrounded by many experienced individuals at Qualcomm Ventures who helped me tremendously in terms of growth and success. Outside of work, I am an avid tennis player and skier. I like to exercise my physical agility. In addition, I am an aspiring classical pianist, although my practice time is under constant challenge with my travelling schedule.”