Royal Philips Electronics, a Netherlands-based technology conglomerate, has become a minority limited partner in local private equity firm Gilde’s third healthcare fund in the first anchor commitment to a venture capital group.
Gilde Healthcare III is raising €200m ($250m) to invest in early and growth stage healthcare technology companies in Europe and the US. Its second fund closed at €85m in 2006 with a final target of €125m primarily for European investments.
Steve Rusckowski, chief executiveof Philips Healthcare (pictured), said its "anchor investment in Gilde Healthcare III is in line with its policy of open innovation and its belief that the most effective way to deploy venture capital is via an independent fund that can leverage the expertise of a professional fund manager and the other investors in the fund".
As one of the fund’s anchor investors, Philips said it had contributed to shaping part of the fund’s scope to invest in patient-centric healthcare, such as home healthcare, sleep improvement techniques, image-guided interventions/therapies and clinical decision support, with particular emphasis on cardiology, oncology and women’s health.
Philips and Gilde have already co-invested in one company US-based BG Medicine that diagnoses heart failure, according to news provider Science Business.
Gilde Healthcare III will be fully independent of Philips’ existing innovation efforts, including the Philips Healthcare Incubator, the company added.
Russ Granzow, vice president of strategic business development and M&A of Philips’ Healthcare Incubator, one of three the Dutch company setup to also cover lighting and consumer products, said Philips’ commitment would be in line with traditional general partner and limited partner relationships but by being an anchor investor it could align its interest and help shape the fund’s strategy in an area that traditionally VCs had struggled to invest in.
He said this was Philips’ first cornerstone commitment to a strategically important area for the group, similar to a commitment made by Unilever to commit to the Physic venture fund. Previously, Philips had spun off non-core technology investments into Prime, which was managed by a third-party and where the Dutch comapny retained an economic incentive.
Granzow said the strategy could be followed in other areas, including lighting and consumer products and other regions, especially emerging markets. He said the anchor investment was designed to seed an industry by showing how VCs could make money from home healthcare andthereby encouraging others to invest, which would provide a greater range of potential partners or acquisition targets for Philips over time.