First Round Capital Makes Largest Investment Ever

Its $4 million investment in Clover Health is double its largest investment to date.


Josh Kopelman of First Round Capital.

First Round Capital has made its largest venture capital investment yet — a $4 million investment in Clover Health.

First Round Partner Josh Kopelman wrote in a blog post announcing the deal that the organization’s investments typically amount to about $500,000 to $600,000 — but it’s offering much more to Clover Health because “its mission to improve health care and drive down medical costs is big, ambitious and vital.”

Clover bills itself as a “whole new kind of Medicare” with software that provides a real-time picture of its members health and history. It predicts when a member needs attention so its medical team can administer care. All told, Clover raised $100 million. It’s headquartered in San Francisco and serves patients in New Jersey.

“It’s abundantly clear that today’s health insurance market is broken,” Kopelman wrote. “When it comes to technology, the giants shaping the industry are trailing 20 years behind. They have vast stores of data but aren’t leveraging them to improve the standard of service or care. Building a new model powered by advanced analytics, Clover is able to raise the bar for patients by connecting them more closely to their physicians, expanding access to medications, and improving monitoring of preventative care and chronic conditions.”

The Clover Health deal doubles First Round’s previous record for its largest investment — $2 million to Flatiron Health in December 2012.

Kopelman touted Clover’s “$0 monthly premium, $0 co-pay for primary care doctors, $0 payment for generic prescriptions, and enhanced out-of-network benefits.”

“In the first half of 2015 alone, Clover members experienced nearly 50 percent fewer hospital admissions and 34 percent fewer hospital readmissions than the average Medicare patient in the New Jersey counties it serves,” Kopelman said.

But don’t expect First Round to change its approach to investing — it’s staying disciplined on its core competency of writing checks between $250,000 and $750,000.

“You don’t want to say never, but we’ve got a very specific model and try to be remarkably disciplined,” said Kopelman in an interview on Friday. “If another once-in-a-lifetime opportunity sees us, sure.”

He said Clover is growing rapidly and plans to use the cash to build its team and expand into other locations across the country.