Five Questions: Greycroft's Ellie Wheeler

In this series, Digital Health Business & Technology will interview a range of digital health investors, from those who work at venture capital firms and at health system and health insurance venture funds, to individual and angel investors. If you’re interested in participating in this series, email us here. 

When Ellie Wheeler dropped out of medical school, there was little indication that digital health would be as developed as it is today.

Wheeler opted for career in traditional enterprise technology at Cisco where she worked in investments and acquisitions. She later joined the venture world to invest in early-stage consumer tech companies. By 2016, Wheeler began seeing digital health’s rise and pivoted her career back to the healthcare world.

“It's meaningful what we're doing here actually can be a real net positive for individuals, for their families and beyond,” Wheeler said. “The mission is an easy one to get behind.”

Wheeler leads New York City-based venture capital firm Greycroft’s digital health team and invests across consumer and enterprise solutions.She spoke about her specific interest areas, why big tech’s entrance in digital health doesn’t concern her and the importance of having more women allocate capital. The interview has been edited for length and clarity.

Sign up for Digital Health Business & Technology's newsletters to stay informed on industry news and trends 

How concerned are you about big tech's interest in digital health?  

I am not surprised. Just given the size of healthcare and the economy, of course, we're going have the corporate [tech firms] make inroads. I actually think having more players can be a good thing when we're in a regulated business like this one. With so many actors, if people start pushing together for certain things to evolve it can be additive. We're going to see more of it. I don't necessarily think it's concerning, I think rising tides lift all boats to some degree. There's so much to do that getting a little bit more light from some of the tech companies is a good thing. There are plenty of places to play if you’re in the existing ecosystem as well as new folks coming in.

What types of specific solutions are the best fit for a market that's seen a broader slowdown due to a number of macroeconomic factors?

Ultimately, we're looking for much bigger [financial] outcomes. So, it does need to have breakout potential—the potential to be a category defining company. We do see a lot of things that could be a good business but it's not going to be that big. [Those companies are] just aren't for us. The question in the back of my mind is always ‘Okay, it might be starting here. Is there a reason to believe that starting there is going to give them an opening to a much broader market?’

Are there any specific areas that meet this thesis?

The trend we've been watching for a while is the customer experience. Thinking about the end-to-end journey, differentiating on experience. This is also getting extended into the financial side in some of the models that we're seeing, which I think is interesting. We've made a few seed investments there and we're interested in that space.

We've also been seeing a lot more tech and tools that are enabling the move to value-based care. Of course, its been talked about for a long time. There are pockets where it's really working and pockets that it hasn't hit. [We’re interested in] the software that makes it happen, because there's still a lot of gaps in administering some of this stuff. [We're looking for companies that are] pperationalizing and getting the tools in the hands of the people who need to make decisions. It matters so much more when you're risk bearing. So, we're seeing a lot of companies think about areas that they can build software to be able to power that.

What's the story that's not getting told in digital health right now?

 It's mostly doom and gloom right now in coverage in commentary and even in just passing conversations, right? It's mostly about the market comps and how much they've pulled back. Particularly for the unprofitable companies, the slowdown in funding has been most acute at the growth stage. It's all the bad stuff. I think we've lost sight, a little bit, of the fact that these are ten to 15 year trends we're talking about. They are still really exciting. We're just in a local minimum—a bit of a dip. To put it in venture terms, it's the J curve. The underlying trends are not going away. These things are real. There are always things that go up quickly and flame out along the way. That's not unique to digital health, that's not unique to the moment. That's part of this business.

Is it more important digital health be more representative of the communities companies are targeting? Are the consequences higher in healthcare?

They absolutely are because it's also about providing culturally competent care on the ground and, particularly as other big trends like hospital in the home become more ingrained, out in the wild. All of that actual work has to be much more diverse, much more thoughtful to be able to really drive outcomes. There are true business reasons and health reasons why that has to be true in healthcare and that absolutely is relevant in digital health as well.