VC firm Split Rock moves away from healthcare deals

April 8, 2014, 7:45 PM UTC
Fortune

FORTUNE — Split Rock Partners is becoming the latest venture capital firm to move away from healthcare investing, Fortune has learned.

The firm, which has offices in Minneapolis and Silicon Valley, always has been a “generalist” shop, with its healthcare practice focusing more on medical device startups than on pharma or biotech companies. But managing director Michael Gorman says that the medical device space has become more challenging in recent years, whereas software and Internet services opportunities have become more attractive.

Going forward, that means that Split Rock will invest most of the remaining uncalled capital in its $300 million fund into tech startups, while being open to “select” healthcare opportunities. If and when Split Rock raises its next fund, however, all of its would be dedicated to tech.

Not surprisingly, this change in strategy is having an impact on personnel. Healthcare-focused principal David Allison recently left to join Versant Ventures, and healthcare-focused managing directors Dave Stassen and Josh Baltzell will not be listed as partners on Split Rock’s next fund. Stassen plans to retire, while Baltzell eventually will search for a new job. Both, however, plan to continue managing out the existing healthcare portfolio.

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