After two years of nurturing medical-technology companies–including one that turns an iPhone into a functioning microscope and another making games to sharpen mental acuity–San Francisco incubator Rock Health has formed a partnership with several venture firms that will see more investment dollars flowing to early-stage companies.
Kleiner Perkins Caufield & Byers , Aberdare Ventures , Mohr Davidow Ventures and the Mayo Clinic will together offer each participant in the Rock Health program $100,000, a significant jump from the $20,000 grant that each participant used to get from investors.
Of the four firms, Kleiner is the only newcomer. The others have provided seed funding, mentoring and other services to start-ups since the incubator was launched two years ago.
Kleiner Partner Beth Seidenberg said her firm has had close ties with Rock Health since its inception, but has never invested in one of the incubator’s portfolio companies. Kleiner has acted as an adviser to the program and some of its portfolio companies, she said.
The four firms, she said, will provide the funding in the form of convertible debt that will eventually convert to small equity stakes when the companies go on to raise Series A rounds. The arrangement is similar to that of technology accelerator Y Combinator, whose companies are offered $150,000 in convertible note financing from the Start Fund, which includes Andreessen Horowitz, General Catalyst Partners , SV Angel and Yuri Milner.
Other venture firms, including New Enterprise Associates and Accel Partners , are still advising Rock Health and its portfolio companies, even if the firms haven’t agreed to the new seed-funding model that others have, Seidenberg said.
The program has always had a wide range of investors, attorneys and business leaders offering mentorship and guidance.
Rock Health is seeking to fill its five-month program with a fourth class of entrepreneurs, the incubator said in a news release. Attempts to reach Rock Health weren’t immediately successful.
The program, which has offices in both Boston and San Francisco, has incubated some 35 start-up companies altogether, companies that went on to raise a combined $25 million in follow-on financings, the founder of the program, Halle Tecco, said in a blog post.
Darren Hite, a partner with Aberdare Ventures , said his firm will be on the hunt for information technologies for the health-care industry, as well as technologies that can extend care into the home.
Aberdare has invested in Rock Health graduates Omada Health Inc., maker of a social program for diabetes prevention, and clinical software maker GoBalto Inc., Mr. Hite said.
Mohr Davidow, which has been involved with Rock Health for more than a year, will be making its first actual investments in the program through its new seed-funding structure, and is seeking companies with technologies to “bend the cost curve” of medicine by improving its delivery to consumers, Associate Abhas Gupta said.
Rock Health has helped launch some notable technology companies during its short existence, including CellScope Inc ., which offers a piece of hardware that turns a smartphone into a clinical-grade microscope. The program also helped launch CakeHealth Inc ., a consumer product that helps with the management of health-care expenses.
