Trends Watch: Health Care Blockchain
- Mar 12, 2020
EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.
This week, Elana talks with Pancho Vanhees, Managing Partner, SAVA Investment Management.
Your firm’s strategy is a health care blockchain hybrid structure focused on trading and venture capital. Can you discuss the attractive opportunities you see in the space and why?
I have an IT background and understand very well the power of real blockchain use. After reviewing hundreds of whitepapers, I came across a company called Solve Care which is disrupting the health care industry and has built a platform for care coordination, administration, and payments.
Most companies that are combining health care and blockchain are talking only about putting medical records on a chain, which is technically not so difficult.
Solve Care has built an open platform to connect with existing infrastructures so that these stand-alone data silos are able to speak to each other.
On top of their platform is also an open marketplace, comparable with the Apple Appstore.
Primary clients include some of the largest global multinational insurance and pharmaceutical companies, as well as hospital networks, government agencies, third-party administrators (TPAs) and value-based accountable care organizations (ACOs), each with a compelling value proposition.
The company did a successful token sale at the beginning of 2018 and their utility token followed the highest compliance standards and is used as the gas for their platform and therefore has a real use case.
As an early-stage investor in the company, which generated positive EBITDA in 2020, I had access to their upcoming equity round and decided to launch a small fund, a special purpose vehicle (SPV) to capture this unique opportunity.
As I see it, investors face some issues in blockchain and crypto investment. Is the underlying business sound? Why does the use of blockchain add value? How do I deal with all the volatility of owning tokens? Our fund approach answers all these questions. We have a short-term discounted window to the underlying equity of Solve Care. Solve Care is uniquely valuable and disruptive in health care, as it’s the first provider to offer a platform solution to all the players in the market simultaneously. And that is why it’s a potential unicorn company, as everyone in health care will benefit from using its model.
By the use of this approach we are combining traditional equity and digital token trading to generate real alpha.
What are the biggest challenges and why?
Fear of the unknown and hype surrounding blockchain, which are both reasonable concerns for most investors to hold. The answers are not avoidance and missing opportunities but transparency and experience in dealing with them. We need to persuade investors that this approach of owning equity and then diversifying risk via trading tokens makes the most sense to someone who needs help when looking at such markets.
The biggest challenge is definitely the token part. Why use tokens instead of cash? Because if you need medical admin services on a global scale, it is easier to manage purchases in tokens than multiple global currencies. I do believe that a select number of tokens will be forming a new digital asset class, comparable with the dot com. Because payment is easy, no fiat currencies are needed, security is better and they can all be held in your ether wallet.
What keeps you up at night?
The different scenarios and the enormous potential we have in our hands, the development of new bot strategies and sometimes my three-year-old daughter. I guess that's why we have power naps.
What's on Your Mind?
Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.
Start a conversation with Elana
Explore More Insights
Insights on the Private Fund Adviser Rules & Form PF for Chief Compliance OfficersRead More
Receive the latest business insights, analysis, and perspectives from EisnerAmper professionals.