Cross-Border Impact Ventures: Innovations in Exits to Ensure Continued Impact in Health Technology
Cross-Border Impact Ventures (CBIV) is a Toronto -based, independent women-led firm on a mission to revolutionize venture capital investing in health technology. CBIV has a global mandate to invest in scalable healthcare technology solutions that have the greatest potential for large-scale adoption across multiple markets to benefit underserved women, children, and adolescents by reducing health inequities globally while earning venture returns. We invest in companies headquartered in North America and Europe with the ability to scale technologies to Emerging Markets.
Women’s and Children’s Health Technology Fund
At over USD 90 million, CBIV’s inaugural fund, the Women’s and Children’s Health Technology Fund I, is the largest women and child-focused health fund in the world at the venture stage. Women’s health has remained grossly underfunded, historically accounting for only 4% of the overall funding for research and development and less than 1% of venture capital investments. In low- and middle-income countries, access to innovative technology is even more difficult. The Fund invests with a dual market approach, by investing in founders scaling products not just for North America and Europe, but also for low- and middle-income countries where health disparities are wider. To date, CBIV has invested in seven companies, spanning women’s health areas such as: postpartum hemorrhage prevention during C-section, non-invasive treatment of urinary and fecal incontinence, and period pain and STD diagnosis. The portfolio is currently active in 14 LMICs and is projected to reach 43-65 million women and children if they succeed in scaling in these markets.
All CBIV portfolio companies enter into an Impact Agreement to contribute to the Fund’s Impact Target of 8M women, children, and adolescent lives improved in low and middle income countries, inclusive of post-exit. In 2024 CBIV had its first exit, with the SaaS company, Sonio, an AI-enabled ultrasound software that helps sonographers identify pregnancy complications and fetal anomalies and diagnose common and rare syndromes. Sonio had already worked to create impact by making their SaaS product available in Nigeria, Brazil, and India and at the time of exit, accessed 142K pregnant women and improved the lives of over 7K pregnant women living in low- and middle-income countries by identifying fetal anomalies and pregnancy complications. CBIV successfully worked with the acquirer, Samsung Medison, and Sonio to restructure the Fund’s Impact Agreement, ensuring the continuation of impact post-exit.
Results and Challenges
During the exit process, Sonio engaged in acquisition discussions with Samsung Medison for many months. After signing the letter of intent and agreeing on the price and key terms, the Impact Agreement that CBIV established with Sonio upon investing became a focal point of the conversation. CBIV acted as a mediator to align the needs and requirements of Sonio, Samsung Medison, with its own requirements to see impact continue in low- and middle-income countries. All parties were highly motivated to continue creating impact.
Through collaboration, the parties agreed on a revised Impact Agreement that included a partial buyout of the existing impact contract and a re-focus of the impact activities in Africa and other low- and middle-income countries that satisfied all party’s needs and motivations. This revised Impact Agreement allowed:
CBIV: To maintain our impact mandate of improving the lives of 1 million women or children in low-and middle-income countries from the investment via a new project that will provide ultrasound probes to sub-Saharan African medical clinics to assess the health of pregnant women;
Sonio: To maintain a company culture focused on impact and health equity while continuing the development of their Point of Care ultrasound device; and,
Samsung Medison: To contribute to impact in alignment with their corporate social responsibility initiatives, which focus on education, and to retain Sonio's internal team culture and talent post-acquisition.
If you are interested in further details about the methodology behind this evaluation, including the Theory of Change Kore Global developed, or more information on evaluation key findings and recommendations, the report can be accessed here.
Lessons learned
When CBIV first created the Impact Agreements, we incorporated an option to exit the impact contract and trigger a charitable gift from exit proceeds towards achieving impact. This was greatly innovative since typical impact agreements – or global access commitments – do not have such features and instead focus on penalties related to intellectual properties with unlimited potential liability for the signatory. Since the CBIV impact contract opt-out clause had not been tested before 2024, it remained a theoretical possibility and did not cover all potential outcomes. Triggering the charitable gift donation option within our impact agreements and negotiating a hybrid solution allowed CBIV to demonstrate that our collaborative approach to impact management can provide impact for underserved women and children even in cases of early exits – a common concern from fund investors- while leaving all parties to the transaction satisfied with the outcome.
For more information contact Annie Theriault, Managing Partner: annie@crossborder.ventures
September, 2024
This publication is made possible by CAFIID’s Gender Lens Investing Community of Practice
