W Health Ventures, a venture capital firm specializing in early-stage healthcare, has announced the initial close of its second fund at $60.7 million. The fund, which targets a final corpus of $70 million, will focus on a hands-on company creation model to address underserved clinical needs. This strategy involves building and scaling between eight to ten new healthcare enterprises over the next four years.
A Strategic Shift to Company Creation
This new fund marks a deliberate doubling down on the firm's evolution from a traditional investor to a dedicated company builder. This strategic pivot began during its first fund and is now the central thesis for its future investments. Managing Partner Pankaj Jethwani emphasized that the firm is one of the few in India focused on creating de novo companies to solve complex healthcare challenges.
With Fund II, W Health Ventures plans to deploy $3.31 million-$5.52 million into each of the companies it intends to incubate. This concentrated, conviction-led model contrasts sharply with the diversified portfolios common in the venture capital landscape. The approach allows for deeper engagement and a more focused effort to build foundational businesses from the ground up, with a target of launching two companies per year.
Addressing Foundational Gaps in Healthcare
The firm's strategy is rooted in the belief that India's healthcare sector is significantly underdeveloped compared to its consumer technology and financial services industries. Jethwani described this 20-year gap as a "generational opportunity" to establish foundational companies that address major global patient pain points. The goal is to create purpose-built ventures designed around clinical innovation and scalable operating models.
In India, the fund will concentrate on building single-specialty healthcare platforms to improve access to quality care beyond the highest income brackets. Key areas of focus include oncology, elderly care, longevity, preventive health, geriatrics, and chronic pain management. This targeted approach aims to create specialized solutions for some of the country's most pressing health concerns.
Leveraging the US-India Corridor and AI
A second major pillar of the fund's strategy involves creating AI-enabled healthcare service businesses that operate across the US-India corridor. Jethwani highlighted the immense opportunity in modernizing the $5 trillion US healthcare system, where nearly a trillion dollars are tied to inefficient, manual workflows. The firm aims to leverage this cross-border trade to build globally relevant companies.
Distinguishing itself from typical healthtech investors, W Health Ventures identifies as "healthcare builders," with a mandate that every new company be "AI-enabled in its bones." This philosophy underscores a commitment to integrating advanced technology at the core of each venture. The focus is on using AI to create scalable, efficient, and high-quality healthcare solutions.
Early Momentum and Future Outlook
Fund II has already commenced its investment activities, demonstrating early momentum with its first incubation, Everhope Oncology. Developed in partnership with Narayana Health, this venture aims to establish a national platform for integrated cancer care. This initiative exemplifies the firm's model of collaborating with established clinical partners to build impactful enterprises.
The firm is also incubating a US-based psychiatry platform in stealth mode, targeting advanced treatments for treatment-resistant depression. This move, combined with the success of Fund I companies like Wysa and Nivaan which have all raised follow-on capital, signals a strong trajectory. This track record provides a solid foundation for the ambitious goals set for the new fund.
With the initial close of its second fund, W Health Ventures is reinforcing its unique position as a creator of specialized healthcare companies. By combining deep clinical insights, a hands-on incubation model, and a core focus on AI, the firm is strategically poised to build foundational ventures. This approach aims to not only generate returns but also to meaningfully advance healthcare delivery in India and the US-India corridor.