Medicare Administrator Turned Health Venture Capitalist Raises $440 Million For New Fund

Andy Slavitt’s Town Hall Ventures has been investing in healthcare innovations focused on low-income and vulnerable communities. With new funding from investors that include John Doerr, it now has total assets of $1.4 billion.

When Andy Slavitt left government, he wanted to prove that you could use technology to improve healthcare for underserved and low-income communities—and still make a profit. The former acting administrator of the Centers for Medicare & Medicaid Services and overseer of the successful turnaround of healthcare.gov, set up healthcare-focused VC firm Town Hall Ventures in the summer of 2018 to do just that.

“I’ve got a little bit of a chip on my shoulder,” he told Forbes. “If [investors] think you are impact, they’ll put you in this bucket—people who do nice things and maybe some nice family office wants to invest in you because they’ve got an impact mandate. I have always resisted that.”

Since its launch seven years ago, Town Hall Ventures has invested in 35 companies and started seven others, including kidney care specialist Strive and Suvida, which offers primary care focused on Hispanic seniors and their families. Its first fund posted top-decile performance, with a net internal rate of return from its July 2018 inception (thru June 30) of 33% versus 12% for the median VC fund. A total of 10 of its bets surpassed a billion-dollar valuation, including Cityblock Health, a healthcare provider focused on low-income communities that was one of its initial investments and has since reached a valuation of $6.3 billion; SignifyHealth, a provider of tech-enabled at-home risk assessment acquired by CVS for $8 billion in 2023; and Landmark Health, a startup offering in-home medical care to patients with chronic conditions purchased by Optum Health for $3.5 billion in 2021.

Buoyed by that track record, Town Hall Ventures told Forbes it has now raised $440 million for a fourth fund, bringing its total assets under management to $1.4 billion. While the New York-based firm, whose general partners consist of Slavitt, David Whelan and Meera Mani, remains small compared to venture capital giants like Andreessen Horowitz, General Catalyst or Sequoia, each of which has tens of billions in assets under management, it’s a well-regarded player in healthcare.

John Doerr, chairman of Kleiner Perkins, has been a significant personal investor in Town Hall Ventures since its inception and has re-upped for every fund since, including the new one. “I believed in what they said they were going to prove to do,” Doerr said. “I think the healthcare industry has not been well served by the tech industry until now. They are a challenging customer and conservative institutionally. I see that changing in this moment.”

“It was very easy to describe the problem. It was very different to say capital and entrepreneurship and innovation is one of the cures.”

Town Hall Ventures’ Andy Slavitt

Slavitt, 58, who before his stint in government worked as an executive at Optum Group, believes that technology can fill many of the gaps in healthcare in low-income and underserved populations. Venture funds have historically shied away from investing in these populations because profit margins from Medicaid are razor-thin and patients face additional social problems, from lack of housing to low-quality food options, that make their treatment more complex.

“It was very easy to describe the problem,” Slavitt said. “It was very different to say capital and entrepreneurship and innovation is one of the cures. It’s one of the things we are good at in this country, so why not lean into it?”

In 2023, Town Hall Ventures invested in Marble Health, which offers virtual behavioral care for teens, focused on group therapy. Partner Mani calls the company’s founders, who came from therapy startup Headway, “relentless and ruthless” in their execution, a necessity for a company that accepts Medicaid insurance for mental health. In 2024, Town Hall launched Habitat Health, which helps older adults in low-income communities manage their health in their own homes, in partnership with Kaiser Permanente. That firm began serving older adults, many of whom are dual-qualified on Medicare and Medicaid, in Sacramento and Los Angeles this year. “One of Town Hall’s superpowers is the combination of mission and track record,” Whelan said.

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That combination has also convinced entrepreneurs of the firm’s value. In 2023, it co-led an investment in Thyme Care, a Nashville-based startup that helps patients navigate cancer care, with help from AI to automate documentation and synthesize complex patient data. At the time, Thyme met 110 potential investors, then whittled the contenders down to five, recalled cofounder and CEO Robin Shah. Despite the fact that Town Hall’s bid valued the business at $20 million less than its $150 million top offer at the time, Shah convinced his board and existing investors to choose them. Today, the company is worth $1.1 billion. “I don’t know if we would be there without Town Hall,” he said, noting the partners’ healthcare expertise and connections.

Slavitt had been a strong critic of President Trump during his first term, but this time he has become close with Dr. Mehmet Oz, and earlier this year was named cochair of the Health Care Payment Learning and Action Network, a public-private partnership to accelerate the health system’s transition from fee-for-service to alternative payment models, such as value-based care, in which providers are paid based on patient outcomes rather than the number of visits or procedures. “With every administration, there’s going to be good things that happen and challenges that happen,” he said. “The good things in this case is that it will be more focused on innovation and data fluidity and being front-footed on AI and more focused on prevention and wellness as that fits into the MAHA theme.”

While the private sector won’t be able to fill the gaps for the millions of additional uninsured people created by the “One Big Beautiful Bill Act,” private-sector technological innovation can help ensure that people don’t lose coverage due to the administrative burden of showing they qualify, he said. Technology “doesn’t close the gap,” he said. “I can’t lie and say that it does, but it’s going to help people.”

With the new funds, Slavitt said that Town Hall can continue to invest in finding—and scaling—tech-enabled solutions to healthcare’s many problems. Among the areas of interest: home care for elderly adults, pharmacy and prescription drug management, and primary care. “These are really big markets and really big opportunities,” Slavitt said. In any one of these areas, “if you can solve the problem well, you can build an extraordinarily big business.”