Lux Capital Partner Deena Shakir joins Yahoo Finance Live to discuss growth in the health tech landscape and private equity interest in health investments.
AKIKO FUJITA: Welcome back to Yahoo Finance Live. Healthcare certainly remains a hot topic, as disruptions from COVID-19 still continue and women's healthcare remain in the spotlight after the overturning of Roe versus Wade. Healthcare and health tech advocates say the field is ripe for investment. And we've got Deena Shakir with us at the desk. She is Lux Capital partner. Deena, good to talk to you. Good to have you in the studio.
DEENA SHAKIR: Great to be here.
AKIKO FUJITA: Let's start with the focus on digital health, obviously, an area you have really zoomed in on. What's the outlook like in the medium term?
DEENA SHAKIR: Well, human health is recession proof. Unless there's a real apocalypse in the near future, we're not going anywhere anytime soon. We'll continue to get sick. We'll continue to have babies. We'll continue to have healthcare issues. And the pandemic really propelled a lot of the digital transformation into permanence.
The major stakeholders in the industry, the payers, the pharma companies, the providers have digital transformation mandates. And they need to work in partnership with these health tech companies who can help them to make those transformations part of their everyday care.
AKIKO FUJITA: Yeah, and I know the last time we talked, you said, you know, despite the slowdown that we're seeing in VC investments, you still see a long-term case for the sector. Now, there's a new wrinkle in all of this now with the overturning of Roe v. Wade. It sounds like you think that there is an opportunity there, at least in terms of investments.
DEENA SHAKIR: Absolutely. I mean, listen, there's a long history of regulatory constraints compelling creativity and innovation emerging from these really difficult situations. And I have been so heartened to see the health tech companies, many of which we've invested in, rising to the occasion and stepping up to fill in where we have gaps right now from what the government is able to provide.
Maven, for example, which is one of the companies in our portfolio, has been one of those companies to provide options counseling, to provide Maven wallet services to their employers. And they've actually seen a month over month increase of 67% in terms of inbound sales opportunities after the ruling.
BRIAN CHEUNG: $75 million in women's health focused companies that you've invested in so far. As you look forward, right-- you mentioned companies that are kind of already in your portfolio in response to what happened with Roe v. Wade-- what other types of companies that maybe you haven't invested in yet are you looking for in terms of the future of a post Roe Wade-- Roe v. Wade world, when you consider health information being a big part of that story as well?
DEENA SHAKIR: Absolutely. Well, when it comes to women's health, it's not only 50% of the population, but 80% of the dollars that are spent in healthcare and the decisions that are made are made by women. And it has historically been incredibly underinvested in and under-researched.
And so there's a massive opportunity across the board, not just in reproductive health and fertility, which continues to be a big area of innovation, but also in menopause care and diversity in clinical trials and actually getting access to resources in the future that can help to be therapeutic interventions for diseases, like heart conditions and cancer. So we're really excited. And I'm seeing amazing entrepreneurs at the earliest days and through growth stages that are coming to the table.
AKIKO FUJITA: Have the investments followed? I mean, you say a company like Maven. Obviously, they've seen huge growth. Are you seeing investor attention turn to that kind of in women's health, especially on the back of what happened with the Supreme Court?
DEENA SHAKIR: Absolutely. I mean, I've been a loud voice on this for a while. So personally, I've gotten so much inbound from investors, some of whom have been active in digital health, but perhaps not as much in women's health, that see capital deployment as a mechanism for action and see an opportunity where there are talented entrepreneurs that are stepping up, who are creating real opportunities for value creation here, as well as for impact.
BRIAN CHEUNG: So when we talk about the macroeconomic environment, a tough situation for perhaps growing companies in their early stages with concerns about this recession. So when we just talk about the overall picture, do you still find a lot of opportunities out there, or are you being a little bit more, hey, we're just going to kind of hang on the sidelines here for investable opportunities, given just kind of the cloudiness of the outlook?
DEENA SHAKIR: Well, you know, of course, as a VC, it's my job to be optimistic. And I am. I'm long-term optimistic. And we're not day traders. So when we think about investing, we think with a 10-year time horizon. Now that being said, we also have to think ahead to the next fundraise and make sure that we're reducing financing risk for our companies. And it is a little icier out there on the growth capital side.
So we've been advising all of our companies to hunker down, to rethink what their expectations are around what that financing will look like. It's been an era of exuberance. It's been an era where every three to four months, perhaps, there's a 3 to 4x markup, where every round is incredibly competitive, and there's an influx of capital from all sorts of resources.
It's unlikely that's going to be the case forever. But I also think it's unlikely that the dip that we're in today is going to stay the dip. We may not see the exuberant multiples that we saw in 2021, but we're definitely going to be in a place where things are going to look positive.
AKIKO FUJITA: So the capital may not be being deployed right now, but there's a lot sitting on the sidelines, $230 billion roughly in the US. We've seen so many new funds close at a rapid clip. Where's all that money going to go?
DEENA SHAKIR: Well, a lot of funds are really focusing on making sure their companies are in a position to withstand the current market. And so a lot of reserves deployment are coming to the table, but also we've seen incredible growth in terms of new funds, especially healthcare focused funds. SVB just released a report a couple of days ago outlining the number of the hundreds of millions of dollars that are going into venture capital funds focused on healthcare.
So there's a lot of dry powder out there. It continues to be an excellent asset class for LPs to invest in. I think a lot of folks are just sort of in wait and see mode in terms of what these multiples look like. The Amazon One Medical deal, though, with some movement, I think that's going to have great implications for the market.
BRIAN CHEUNG: All right, Deena Shakir, Lux Capital partner, thanks again for stopping by in person.
DEENA SHAKIR: Yes.
BRIAN CHEUNG: Stop by [INAUDIBLE].
DEENA SHAKIR: Absolutely. Thanks for having me.
BRIAN CHEUNG: Appreciate it.