Questa Closes Fund I and Continues Investment Momentum with 3 New Portfolio Companies

November 8, 2018

We at Questa Capital are very pleased to share the news that we concluded fundraising for our debut fund in the summer of 2018 with a total of $199M in committed capital. We are thrilled with the support we have received from our outstanding group of limited partners including leading endowments, pension funds, family offices and fund of funds. We are also honored to have many of the senior executives with whom we have worked over the years invest in Fund I.  Special thanks to the outstanding team at Acalyx Advisors who partnered with us on our fundraising effort.

Questa concentrates its venture growth equity strategy on investments in expansion-stage healthcare companies in the medical device, healthcare services and tech-enabled healthcare sectors where we target investments of $10-40 million per portfolio company.  Through our deep industry networks built over two decades, we continue to find and actively deploy capital into attractive growth companies. We have closed three new investments in 2018, bringing our total portfolio to six companies, two of which recently completed follow-on rounds of financing.

In Q2 2018, Questa closed an investment in Intrinsic Therapeutics to support the FDA approval and U.S. market launch of its Barricaid technology. The Barricaid is a spinal implant which is implanted during lumbar discectomy spine surgery to prevent painful recurrent disc herniation and avoid subsequent re-operations. Lumbar discectomy is the most frequently performed spine surgery in the U.S., with more than 400,000 procedures annually. The clinical value of the Barricaid is supported by statistically-superior positive clinical results from a 554-patient randomized clinical trial comparing Barricaid to discectomy alone, demonstrating a 55% reduction in symptomatic re-herniations and a 50% reduction in re-operations at the 2-year follow-up time point. We believe that Intrinsic has an outstanding opportunity to become a gold standard in spinal surgery and improve the care of hundreds of thousands of patients per year in the U.S.  We have had a strong relationship with Intrinsic’s management team for many years and our familiarity with the company and the sector positioned us well to understand and seize the investment opportunity. We are excited to partner with the Intrinsic team to support the next phase of their growth.

In Q3 2018, Questa made an additional investment in Dispatch Health to support the company’s continued rapid growth. Dispatch provides mobile urgent and emergency care services in lower-cost alternative sites to the hospital such as the home or assisted living facility. Dispatch is now providing services in eight geographic markets, including Denver, Colorado Springs, Las Vegas, Phoenix, Oklahoma City, Houston, Richmond and Springfield (MA). The company continues to expand to new geographic markets and is growing at an annual rate of more than 100%. Dispatch is establishing enduring relationships with patients, health insurers and hospital partners and is generating both excellent customer ROI and outstanding patient satisfaction.

In Q4 2018, Questa welcomed two new companies to our portfolio with investments in Eximis Surgical and Cortica.  Eximis is a medical device company developing a novel technology for minimally-invasive surgery (MIS) that enables several common MIS surgical procedures and will reduce cost, accelerate patient recovery time and reduce procedure time for physicians.  Cortica is a provider of neurocognitive care services to children with autism spectrum disorders and other neurocognitive disorders.  Cortica offers a highly-integrated range of critical services at its centers, including clinical care, ABA therapy, occupational therapy, speech therapy, biofeedback and nutritional counseling.  Cortica’s leadership team includes world-renowned pediatric neurologists who guide clinical care and develop patients’ therapeutic plans.  Both the Eximis and Cortica investments were a direct result of Questa’s proactive sourcing model and deep industry networks and represents the first institutional capital investment in each company.

We are also pleased with the progress at existing portfolio companies Medrio and EPIX and have reserved capital to make additional equity investments into each company to support continued growth.  Medrio continues to expand globally and strengthen a market leadership position in providing cloud-based eClinical solutions to clinical research organizations and sponsors.  EPIX recently completed enrollment in the 450-patient randomized pivotal trial of its DiamondTemp catheter for paroxysmal atrial fibrillation and has commenced patient enrollment in an additional registration trial in persistent atrial fibrillation. We expect the company to execute a commercial launch of its DiamondTemp catheter in the U.S. during 2020.

We are pleased to announce a new addition to our investment team. Brian Butler joined Questa in July as a Vice President after graduating from the Stanford Graduate School of Business. Brian has significant previous healthcare investing experience from Great Point Partners and is based in Questa’s San Francisco office. With six full-time team members, we are now well-staffed to handle our robust deal flow.

Thank you for your continued support of Questa. Please contact us if you’d like more details on any of the topics discussed above or visit our offices when you are in Washington DC or San Francisco.  We look forward to sharing regular updates going forward and wish you all a wonderful and peaceful upcoming holiday season.