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Scoop: Digital health firm closes $85M fund

Illustration of a first aid bag filled with cash.  

Illustration: Aïda Amer/Axios

LionBird, a digital health venture capital firm based in the U.S. and Israel, closed its third fund, an $85 million financial pool it'll use to back 15-18 health tech startups, managing partner Edward Michael tells Axios exclusively.

Why it matters: With investor interest in digital health at unprecedented highs, LionBird is just the latest firm to unveil a new fund dedicated entirely to companies at the intersection of health and technology.

Other notable recent fundraising activity includes:

  • In January, Andreessen Horowitz launched its fourth and largest-ever Bio Fund, a $1.5 billion sum for startups in medicine, digital health and the life sciences.
  • The following month, Arch Venture Partners, a firm known for its contrarian risk-taking philosophy, raised $2.5 billion for its latest fund, called XII.
  • And this month, global health care company AmerisourceBergen launched its own venture fund, AB Health Ventures, with $150 million for early-to-mid stage health startups in pharmacy, clinical development and animal health.

Context: Founded in 2012, LionBird backs companies it believes can use technology to demonstrate positive outcomes for patients and providers.

  • So far, it has backed roughly 30 startups including New York-based robotic limb technology company Phantom Neuro and Israeli home recovery startup Laguna Health.
  • While the firm is chiefly focused on seed investments, it will occasionally participate in a Series A and — every so often — the rare Series B, Michael tells Axios.

Details: This is LionBird's biggest fund yet at nearly three times the size of its second $35 million fund and more than four times the size of its first $20 million fund.

  • As part of the deal, LionBird is adding two new partners: Robert Lord, previously co-founder and president at health compliance startup Protenus, and Gal Noyman-Veksler, a health care executive and behavioral researcher who was previously a principal at the firm.

What they're saying: LionBird started out backing a mix of business service and digital health companies, but has increasingly gravitated towards digital health, Michael says.

  • "We think the time is right, and we’re excited about all the things we’ve learned from the pandemic," adds Michael.
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