Five Questions: Wavemaker Three-Sixty Health’s Maxim Owen
When Maxim Owen came to New York City from London in 2016, the digital health investment scene was starting to pick up.
Owen landed at Startup Health, an early-stage health tech investment firm. There, he invested in more than 100 early-stage companies.
"They were super involved with capturing the magic of the new digital health ecosystem back in 2015 and 2016," he said. "They were designed to support entrepreneurs at the early stages in healthcare."
At Startup Health, Owen met the founders of Wavemaker Three-Sixty Health, a VC firm where he is now a venture partner. Through his work at Wavemaker, Owen helps bring a level of strategic support that may be otherwise inaccessible to very young healthcare technology companies.
“We’re helping early-stage health technology companies get in those meeting rooms [with health systems and insurance companies] and sign those commercial contracts,” Owen said.
Owen spoke about how the digital health startup scene has changed over time, what he wants to hear from digital health entrepreneurs in the initial meeting and more. The interview has been edited for clarity and length.
How has the digital health startup scene evolved since you first came to New York?
The startup scene was humming, particularly in New York City, in those pre-pandemic years. New York was ascending as a real hub for early-stage healthcare investments.
It has started to come back now. There is a ton of health innovation happening within New York, which lacked a community feel during the pandemic, as I'm sure was the case everywhere. Remote work was great, and it means you can hire fantastic talent from all over the country, but it’s important for entrepreneurs to be around each other. Founders can't complain down to their teams and they can't complain up to their boards. They can really only vent to each other and be vulnerable with each other, because they understand what it is like. Having a community like that is just highly valuable.
Which areas of digital health are undervalued, from your perspective?
Our previous three investments have been non-U.S.-based companies. Specifically, they've been in the U.K., which is partly because of my network there.
It’s kind of an overlooked market from a U.S. investment perspective. When you look a little closer, you'll find you have a ton of innovative institutions, such as university hospitals, that are doing interesting work. There’s a lot of non-dilutive funding being distributed out there. And then you have the National Health Service, which is effectively a closed system that these companies can kind of try and innovate within, using relatively uniform economic models. It's a really interesting proving ground for some healthcare technology companies.
And then because the market is so big here, [all the U.K.-based companies] want to come to the U.S. We've found ourselves in an interesting position of being a fund that can help with that transition, given all our relationships in the U.S. healthcare system. It’s an interesting opportunity as a fund looking at non-U.S.-based businesses that have commercial ambitions here.
Why aren't more American companies looking at opportunities in overseas markets?
The people in the U.K. are always telling us, "Let me know when your U.S.-based companies want to come to our markets. We’re primed and ready." The hard part is finding a business model that works in different kinds of health systems. If you have had success with Kaiser Permanente, you might play well in the NHS Trust, which is similar. If you're doing value-based care in the U.S., you have to find an equivalent type of structure that will work in any European market, which may be harder to identify. You need to have an analogous business model that is transferable across markets. It is definitely an opportunity to think about, but I think the companies in the U.S. are just so heavily focused on cracking the Sisyphean task of trying to get in market. And it’s such a big market that there isn’t necessarily a commercial necessity for going outside the U.S.
What do you want to hear from digital health founders when you first meet with them?
Everyone within the fund has come from healthcare. And so we're looking for founders to really just know about healthcare. This doesn't mean you have to come from the industry or have a clinical background, but we expect you to know your section of healthcare inside and out. This could be shown through a vision for how your product will integrate with the rest of the existing systems or the strength of your return on investment. At the end of the day, we are talking to people who have either run hospital systems or health plans, who are doing surgeries today, or who work at the Food and Drug Administration. It can be harder to spin some of the usual entrepreneurial narratives when talking to our group.
The other thing is on valuation. We can't not talk about valuation. The market has moved. Last year's prices are not today's prices. We meet tons of great founders at the moment whose businesses we want to invest in, but there's been a rigidity from them on not wanting to bring their valuations down. I'm empathetic because investors are supposed to see the market as a whole and the shifting landscape, whereas entrepreneurs are rightly focused on their problem area. So maybe they don't have the benefit of that overall view. It’s going to take a while for the ecosystem to adjust to this landscape.
As an expat, how do you find watching the Premier League in New York rather than in London? That can’t be easy.
The U.S. is actually a better place to watch Premier League soccer than the U.K. The main game in the U.K. is played at 3 p.m. local time. They don’t show the 3 p.m. games on TV in the U.K., which is a hangover [rule] from the 1990s to encourage fans to go to the stadiums. They don’t show the majority of matches on TV on Saturday afternoons, which just seems crazy in this day and age. I’m a big Chelsea F.C. fan. An American private equity executive, Todd Boehly, just bought the team. He must see [the lack of TV time] as a huge revenue opportunity for the team. The other thing is because of the time difference, I watch them at 7 a.m. or 8 a.m. in New York. I like that it doesn’t take up your whole day.
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