CSS invests in start-ups and thus in the future of healthcare

The CSS Group, the Swiss market leader in basic insurance with over 1.5 million insured persons, has been focussing on innovation in the healthcare sector since 2015. The CSS Health Lab is driving forward digital therapies and the Future of Health Grant supports the development of digital healthcare interventions. SwissHealth Ventures AG invests in start-ups that are committed to a high-quality and cost-efficient healthcare system. With this strategic focus, CSS is positioning itself as a pioneer in corporate venturing in Switzerland.

thebroker talks to Torsten Butz, Head of Business Model and Innovation Development at CSS.

Why is CSS the ideal healthcare partner for ambitious start-ups in the field of digital health?

Innovation in the field of digital health is a strategic cornerstone at CSS: Our enormous commitment is unique in the industry. After all, digital health harbours great potential for improving the quality of treatment and reducing healthcare costs. We’re talking about networked devices, remote and online treatments – in the areas of prevention, information and health counselling. CSS identified this potential ten years ago and has since launched three support vehicles in the field of digital health: the CSS Health Lab, the Future of Health Grant programme and SwissHealth Ventures AG. These are financed entirely from our supplementary insurance business. In addition, an internal innovation team is constantly working on new business ideas for CSS. This well thought-out approach is in line with CSS’s commitment to its policyholders and to the sustainable development of the Swiss healthcare system.

Digital therapies are being researchedwith the CSS Health Lab. Can you give some examples?

We founded the CSS Health Lab back in 2015, together with ETH Zurich and the University of St. Gallen. In the research lab, we develop and test innovative solutions that enable people to better manage chronic illnesses. The ‘Breeze’ app, for example, offers smartphone-based breathing training with a playful approach. The application automatically recognises different breathing phases and whether they are taking place correctly. At the same time, a gamification concept is designed to increase motivation and therapy success. The CSS Health Lab is also investigating how the degree of depression can be measured digitally using biomarkers, i.e. more measurable biological indicators such as voice and breathing. A corresponding digital marker should help to dynamically adapt treatment and prevention to the individual.

Together with the EPFL Innovation Park, you launched the Future of Health Grant in mid-2022 . thebroker has already reported on several start-ups. What is it all about?

The Future of Health Grant (FoHG) supports early-stage start-ups and project sponsors in the field of digital health with coaching, mentoring, practical professional services and small financial contributions. The aim is to advance these start-ups quickly and in a resource-efficient manner with customised and targeted support. The expertise comes from the partnerships that FoHG is constantly forging with key players in the healthcare sector. In addition, one of FoHG’s medium-term plans is to create an ecosystem in which the various players can exchange ideas and jointly develop digital solutions. So there are further plans for the future.

CSS invests in start-ups through SwissHealth Ventures AG. Which companies in particular?

With its corporate venturing strategy, CSS invests in start-ups that advance the Swiss healthcare system with their ideas and offer our clients new digital healthcare services. SwissHealth Ventures invests in start-ups that already have a track record of success in line with market venture capital standards: Market launches, paying customers and significant growth. Foreign start-ups are welcome as soon as their offering is relevant to the Swiss market or could become relevant in the foreseeable future.

How many start-ups does CSS want to invest in?

We are aiming for a portfolio of around 15 to 20 start-ups, which will be constantly renewed over the years and refinanced by the exits themselves. In technical jargon, this is referred to as an ‘evergreen’ fund. In other words, we have created a very market-orientated innovation channel that will be financially self-sustaining in the long term. Since the launch of SwissHealth Ventures AG in 2020, we have already made ten investments.

How much money does SwissHealth Ventures invest in start-ups?

Specifically, we invest between CHF 0.5 and 4 million per startup in Series A and B rounds. CSS’s stake always remains below 20 per cent.

In addition to supporting start-ups, CSS also has a strong culture of innovation in all areas. What innovative prevention services does CSS offer its clients exactly?

As a health partner, CSS is very strongly committed to prevention. Numerous offers are available as an app. Among other things, we offer online coaching and training to combat depression, anxiety, sleep disorders, stress and pain, as well as exercise coaching and nutritional advice. There is also an online skin check and an app to help you measure your blood pressure correctly. Finally, CSS health coaches advise our insured persons online on all matters relating to their health. Our range of services is constantly being expanded.

Are you thinking about setting up an incubator?

With the Future of Health Grant, we support start-ups in developing new services that are relevant to the Swiss healthcare system. There are already many incubators – but we want to offer broad and targeted access to expertise in the Swiss healthcare market (e.g. hospitals, doctors, insurers), because the healthcare system is complex. This is what sets us apart from many other funding programmes. There are currently no plans to supplement the Future of Health Grant with a physical incubator, for example with office space.

Are there any examples that show how CSS’s involvement has improved the quality or efficiency of healthcare in Switzerland?

At this point, I can present a specific start-up that has successfully completed the Future of Health Grant Programme: YLAH, a Bern-based startup. It offers blended psychotherapy and combines traditional psychotherapy and online therapy activities. This enables patients to have a positive influence on their psychological recovery between sessions.

Next steps?

In view of the fact that people are living longer and longer, we want to support our policyholders in leading a healthy and happy life for as long as possible. As a health partner, we offer them various options: New digital apps, advice on specific topics, monitoring, exercises and check-ups. With the digital platform ‘Pensionato’, we are currently testing an offer that aims to raise awareness for a successful transition to retirement. After all, the new phase of life should be as fulfilling and healthy as possible – and we want to make a contribution to this.

Torsten Butz leads the Investment, Innovation and M&A Activities at CSS. In this role, Torsten has also been responsible for creating the «SwissHealth Ventures AG» in 2020 to invest directly in digital health startups and to support innovative ideas for a high quality and cost-effective health system. Prior to joining CSS, Torsten worked at Cisco Systems and Mobiliar Insurance in the fields of Corporate Innovation, Technology Management and Strategy.

Also read: YLAH: Startup hilft bei geistigen Gesundheitsproblemen