Rock Health Founder Halle Tecco Discusses the Future of Digital Health in VC Interview

Rock Health is a seed fund dedicated to digital health, founded and managed by Halle Tecco. Over the past four years, Rock Health has supported more than 80 healthcare technology startups, including Omada Health, Doctor on Demand, and Augmedix. Recently, Halle Tecco participated in “Ask A VC,” an interview series hosted by the renowned tech media outlet TechCrunch. VCBeat has compiled the highlights from this session for our readers, offering insights into this prominent female venture capitalist’s perspectives on digital health.

Q: In 2014, everyone was talking about wearable technology. It is estimated that ten million activity monitors were sold in that year alone. So, what is the next phase for wearable technology?

A: In the spring of 2014, we conducted a series of studies on wearable technology and found that venture capital investment in this field grew fivefold from 2011 to 2013. This trend gave rise to the transaction records mentioned in the question, as well as the concurrent surge in wearable device sales (with Fitbit being a prominent leader). These early wearable devices were primarily simple activity trackers performing basic measurements, but we believed they opened a door to greater possibilities.

We are beginning to see some products incorporate highly interesting biosensing technologies, such as using microneedles to non-invasively access interstitial fluid or to measure new data sources. For example, Spire can capture users’ respiratory data, and a company called Empatica is attempting to predict epileptic seizures. Therefore, beyond existing activity tracking, wearable technology is likely to focus on additional areas in the future. Of course, there is also Google’s contact lens for non-invasive blood glucose monitoring—which is truly cool. The inventor of this technology recently moved to Amazon. It remains unclear whether Amazon will make significant strides in this area, but it is encouraging that tech giants are indeed starting to invest in this field.

Q: When discussing health and activity tracking, people often overlook the vast amount of personal data involved. Should we be concerned about where this data is headed?

A: Your concerns are valid; there is indeed a group of people who are deeply concerned about this issue. Personally, however, I struggle to envision how such data could be used against me. If someone were to steal my health data, what would their motive be? My employer cannot fire me on that basis, nor can my insurance company charge me higher premiums as a result. I fail to see the incentive for stealing health data, and therefore believe we should not view this issue through such a lens. While personal data security is a consideration that any technology must address, the worst-case scenario in my view is that people become so fearful of privacy breaches that they refrain from using these technologies, thereby missing out on opportunities to better understand their own health. We refer to this as citizen science—having more data enables us to find more answers. Keep in mind that having my ATM card stolen would be far worse than having my Misfit data compromised.

Q: I know chatting with mini-programs can be a lot of fun. But what I want to ask is whether the company you are partnering with aims to achieve some kind of social impact?

A: Let’s look at an interesting example: Oscar Health is currently providing Misfit Flash devices to its members, who can receive monthly discounts on their health insurance premiums by wearing them. I believe this initiative has significant implications—it represents a tangible financial incentive to encourage patient engagement in care. While it may not necessarily have a substantial social impact on truly low-income individuals, I am optimistic that such incentives can be effective. Imagine the potential impact if Medicare/Medicaid adopted similar approaches and offered rewards to their beneficiaries. The American Association of Retired Persons (AARP) is also conducting an intriguing pilot program, testing wearable devices in the market among adults aged 55 and older. Traditionally, wearables have been purchased primarily by individuals in their early twenties; the test results will hopefully shed light on how activity monitoring via wearable technology influences the behavior of older adults who are less tech-savvy.

Q: According to CrunchBase data, some of Rock Health’s partner companies have continued to secure follow-on funding from corporate venture capital. Can we expect to see more corporate venture capital activity in the next year or two?

A: One particularly intriguing aspect of wearable devices is that many medical device companies have established highly complex device ecosystems over the past few decades. If they can figure out how to innovate, they will be able to carve out a strategic position and help build sophisticated wearable device systems.

Generally speaking, in the field of internet healthcare, enterprises are always a few years behind. They need to learn, develop strategies, and gain widespread consensus on these strategies... but they have begun to catch up. Many traditional healthcare companies, whether Blue Shield of California or United Health Care, have started to realize that they can innovate and grow by investing in such (internet healthcare) companies. Recently, Qualcomm and Novartis established a venture capital fund as a joint venture, which I believe is a very interesting combination of two components of internet healthcare.

Q: What trend in internet healthcare excites you the most?

A: One of the major trends we are highly optimistic about is the concept of internet healthcare. If we divide medicine into two parts—diagnosis and treatment—there are many areas where technology can significantly reduce costs and improve accessibility. We have a partner company, Neurotrack, which can detect Alzheimer’s disease using software alone. It uses the camera on your laptop to observe your eye movements while you take an online test, and then informs you of your likelihood of developing Alzheimer’s. It delivers test results faster than any other device on the market. Because it is software-based, its cost is negligible, and what it achieves is truly unprecedented. Generally, by the time someone is diagnosed with Alzheimer’s disease, it is already too late, and any treatment is ineffective. For this reason, we have yet to find a cure for this debilitating condition. If we could predict the likelihood of individuals developing Alzheimer’s ten years earlier, we could trial more medications and identify effective cures. I find the application of this technology at the diagnostic level to be both fascinating and exciting.

Q: What are you still looking for?

A: My colleagues always say that we are looking for health apps that can appear on people’s iPhone home screens. In other words, these apps should be used frequently and be important enough to rival social apps like Facebook and Venmo, firmly occupying a spot on the phone’s home screen. I know this is a vague answer, but personally, I am very eager to see healthcare break down the walls of hospitals and become something consumers can manage themselves, rather than relying solely on doctors who are both expensive and difficult to access at any time. We have not yet found such a treasure in the healthcare sector—a brand that we truly love, respect, and trust—which is exactly what we hope to see.

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