S3 Ventures Announces $75 Million Medtech Startup Fund

While the economy in the United States is on the path to recovery, many medical device startups still face challenges in securing adequate funding options. A new $75 million fund by S3 Ventures (Austin, TX) hopes to change that, according to the Austin American-Statesman.

The new fund is slated to be announced today and will provide funding for medical device and information technology companies. Investments will be relatively small and diversified -- S3 Ventures' plans call for investments ranging from $4 million to $6 million. In total, the fund will assist 12 to 15 startups.

S3 Ventures is itself relatively small. As of now, the venture investment firm currently controls approximately $170 million. However, even small investments play a critical role for modern medical device companies. In many cases, traditional venture investors avoid diagnostic and medical device startups until their products reach a point where risk is diminished. For companies that are still in the early stages of development, this can make it difficult to garner the support of investors.

Current at S3 Ventures are focused on the IT field. However, the company does have OrthoAccel Technologies (Houston, TX) in its portfolio. OrthoAccel manufactures orthodontic and dental care devices.

In the earlier part of this year, another company announced that it would enter the early-stage investment area for medtech startups. In March of this year, a $516 million fund was launched by Third Rock Ventures. The fund is designed to help 16 pharmaceutical, diagnostic and medical device companies bring their technologies to market.