1Mby1M Virtual Accelerator Investor Forum: With Dafina Toncheva of US Venture Partners (Part 4)

Sramana Mitra: Let’s build on that and understand your geographical preferences. Are you investing only in Silicon Valley or are you investing more broadly?

Dafina Toncheva: When it comes to cybersecurity, we like Israel a lot. It’s an area that we have been investing in for 20 years.

Sramana Mitra: There are lots of great security companies in Israel.

Dafina Toncheva: We invest in Israel but most of our investments are in the United States. Within the United States, we have made investments in the Valley, LA, New York, Atlanta, and Utah. I’ll tell you one thing. I, more and more, like companies out of the Valley, especially companies thathave business presence in the Valley but R&D outside of the Valley. Silicon Valley has become very competitive when it comes to security. Companies can outsource their development and engineering somewhere else where talent is slightly less expensive and more loyal. It can be a true competitive advantage.

Sramana Mitra: I agree.

Dafina Toncheva: The company I talked about earlier started in Australia. We waited until the company switched the business entity to US. Their entire R&D team is still in Brisbane. They raised $5 million. Development resources in Brisbane are about 60% of the cost here. Having R&D outside of the area is beneficial. I like to find companies like that.

I also find companies outside of the Bay Area to be very compelling. There’s something really cool about being outside of the noise. Everybody talks about the benefits of being in the Valley. There’re also benefits of being outside, which is you can focus on your business and avoid the hype. You can really concentrate on what’s most important.

Sramana Mitra: Our accelerator is global. We do see global deals. We are interested in investors who are willing to take that as a competitive advantage. All the things that you talked about are very much in sync with our philosophy.

Dafina Toncheva: I’m Bulgarian. I go there once a year to speak to the entrepreneur community. My advice is that majority of the venture firms in the Valley will consider investing in a company that started abroad as well as the executive team who moves to the US. R&D can be kept abroad.

Sramana Mitra: We’re seeing more and more from Europe these days. We have some interesting partnerships underway from Europe. The other question I have about the other aspect of your investment, which is healthcare IT. Can you elaborate on that a bit? We do have a lot of healthcare IT activity as well these days?

Dafina Toncheva: It’s not my area of focus. Two of my other partners focus on that. The way we think about them is IT companies who happen to solve business problems within the healthcare space. I think of them as vertical SaaS. That being said, my partners also would look at healthcare companies like Digital Diagnostics for example.

We have a company called HeartFlow, which is an incredibly exciting company. It has developed a novel way of diagnosing coronary heart disease, which today is done in a very invasive way. It’s done through a hospital visit. Usually, the patient is put under anesthesia. This company takes a CT scan of the heart and sends it to the cloud where it will be analyzed by algorithms.

Within an hour, the doctor gets to know what the state is. Usually, it is more effective than the invasive, in-hospital procedure. HeartFlow is an incredible company because it’s a multi-billion market not just in the US but abroad as well. About 50% of these procedures today are unnecessary. Because coronary heart disease can be fatal, doctors prefer to go the safer route of assigning the procedure to patients who might be at risk.

Imagine if 50% of the patients who today have to go through this no longer have to go through it because HeartFlow can now do that. We look at digital health. We have a company called Omada which helps prevent diabetes very effectively. We work with large employers to have their employee base lose weight and get a healthier life. My focus is more on the business side of things. How can hospitals run better? How can various business processes be automated?

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Dafina Toncheva of US Venture Partners
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