Most venture capital investors don’t have a focus. Kleiner Perkins says it is “in search of the next big idea.” Draper Fisher Jurvetson “backs extraordinary entrepreneurs everywhere who set out to change the world.” Mohr Davidow values “entrepreneurs who identify impressive market opportunities and are not afraid to go after them.”
Physic Ventures is different. Its mission is “investing in keeping people healthy.” Specifically, the San Francisco-based venture firm, which has backing from corporate giants Unilever, PepsiCo and Humana, invests in “technology-enabled, consumer-facing companies that help people and the environment stay healthy,” according to Will Rosenzweig, its managing director.
Physic is betting that it can discover and invest in startups that can make “personal and planetary health” a big business, just as richer and better-established Silicon Valley VCs made fortunes by backing information technology startups like Apple, Google and Amazon.
I had lunch recently with Will Rosenzweig in Washington to talk about Physic and some of its portfolio companies. Will is an engaging and interesting guy, best known for starting a company called The Republic of Tea in the early 1990s. (He and his co-founders, Mel and Patricia Ziegler, who also co-founded Banana Republic, wrote an acclaimed book about the experience that’s also called The Republic of Tea.) Will, who is 51, was also an early organizer of the TED conferences, the head of marketing for Odwalla and a teacher at the Haas business school at Berkeley.
Will and Dion Madsen, who had run a venture fund inside Unilever, the $57 billion consumer products giant, co-founded Physic Ventures about five years ago. It’s an independent fund whose corporate backers who offer strategic advice and research insights. Its financial investors include CalPERS and CalSTRS, the California state and teachers’ pension funds.
Will has written about the fund-raising efforts and strategy in an article called 7 Reasons Why Great LPs Invested in Our First-Time Venture Fund . [PDF, download] He and his partners raised about $159 million by 2008–an impressive amount for a fund in a new sector, with no track record of successful exits.
It’s much too early to judge the success of the fund or its investment thesis, but there’s no doubt that Physic has invested in some intriguing startups. [click to continue…]