Healthcare Insights for 2024 w/ Megh Gupta, Partner at Wittington Ventures

Jared S. Taylor: What’s your outlook for healthcare in 2024, especially concerning funding?

Megh Gupta: 2024 will likely see more startups winding down, a consequence of the past generous funding environment. This scenario will prompt increased startup-to-startup M&A activities, as well as acquisitions by larger players in healthcare due to more favorable valuations. The funding activity might mirror 2023, with a potential upswing in the second half of the year. However, the public market’s behavior will be a key determinant of private market valuations.

Jared S. Taylor: How do perceptions of success and failure differ between founders and fund managers?

Megh Gupta: There’s a notable difference in how society perceives founders and fund managers. Founders who have experienced failures are often seen as more attractive due to the valuable lessons they’ve learned. Conversely, fund managers are scrutinized more critically for their failures.

Jared S. Taylor: What drew your attention to Truvian, and what are your thoughts on their growth and future?

Megh Gupta: Truvian’s mission and its potential impact on healthcare outcomes made it a compelling investment. Their rapid, accurate diagnostic testing technology aligns with the shift towards value-based care, promising improved patient outcomes.

Jared S. Taylor: What factors influence your investment decisions, particularly in companies like Truvian?

Megh Gupta: Key factors include team quality, technology, product strength, unique value proposition, business model scalability, and potential exit strategies. We assess these aspects to ensure alignment with our risk-reward expectations.

Jared S. Taylor: Have investor timelines and expectations shifted, particularly regarding profitability?

Megh Gupta: Yes, there’s a shift in investor timelines and expectations, especially in ongoing investments. The current economic climate has extended investment horizons, with a growing emphasis on sustainable growth and profitability.

Jared S. Taylor: Do you foresee a return to more frequent IPOs in healthcare?

Megh Gupta: I believe IPOs will make a comeback as part of the economic cycle. The timing depends on market stabilization and investor appetite for risk, which could lead to a resurgence in late 2024 or early 2025.

Jared S. Taylor: What healthcare areas are currently piquing your interest?

Megh Gupta: We are focused on novel delivery models for chronic conditions, data interoperability enhanced by AI, synthetic data applications, and platforms for testing new technologies. The continued interest in value-based care is also significant.

Jared S. Taylor: Are there any areas of healthcare you’re cautious about investing in this year?

Megh Gupta: Direct-to-consumer healthcare businesses, especially new ones, face higher bars due to the significant costs associated with customer acquisition and the current capital environment.

Jared S. Taylor: Who are some of your favorite co-investors or firms?

Megh Gupta: We’ve enjoyed co-investing with USV (Union Square Ventures) and are open to collaborating with a range of firms like NEA (New Enterprise Associates), Flare [Capital Partners], Digitalis [Ventures], and others. The pandemic has facilitated building meaningful relationships across the healthcare investment landscape.