For more than a decade, venture capital has refined a highly effective formula for building companies in enterprise software, fintech, consumer technology, and others. Speed, scale, and aggressive capital deployment have become the default ingredients for success. In healthcare, however, this same recipe often produces disappointing results. The sector moves to a different rhythm – one governed by clinical evidence, regulatory scrutiny, institutional inertia, and, above all, trust.
It is this mismatch between venture expectations and healthcare reality that underpins the strategy behind PurposeTech’s upcoming second fund, set to be formally announced in January 2026. Rather than forcing HealthTech companies into exponential growth patterns borrowed from the VC playbook, the fund is designed around a more sober assumption: in healthcare, defensible niches can be built, but rarely through exponential growth curves. Instead, value is created through paced, profitable growth that reflects fragmented markets and conservative adoption.
To reinforce that philosophy, PurposeTech has brought on board Professor Shafi Ahmed as Senior Partner for its second fund, joining General Partner Zdenek Fred Fous. Prof. Ahmed, an elite UK surgeon, globally recognized health futurist, and Nobel Prize nominee, brings decades of frontline medical experience to a fund explicitly seeking to rethink how early-stage HealthTech should be built and financed.
The two recently sat down for an in-depth podcast conversation, examining what is structurally broken in HealthTech investing and exploring what more functional alternatives could look like.
Lessons from the First Fund
Over the past two and half years, PurposeTech reviewed close to 3,000 early-stage companies across its core verticals in Central and Eastern Europe. Roughly eight percent of the ventures reviewed demonstrated strong domain expertise, credible teams, and genuine clinical and operational relevance. Even within this high-quality cohort, the ability to raise capital remained exceptionally rare.
According to Fous, the issue was not execution or mediocrity, but economics. Most of these companies addressed markets measured in tens or hundreds of millions of euros – commercially meaningful, but structurally incompatible with venture funds that require billion-euro outcomes to satisfy portfolio math. This helps explain why PurposeTech’s first fund, structured as a classic VC vehicle, invested in fewer than 0.5% of opportunities screened.
Fous argues that healthcare – defined by fragmentation, conservatism, and complex stakeholder dynamics – is poorly suited to high-velocity experimentation and aggressive scaling. When early-stage HealthTech companies are pushed into artificial hypergrowth, the more common outcomes are burnout and failure, not durable innovation or success.
Designing for Profitability
PurposeTech’s second fund is structured to work within these constraints rather than against them. Its thesis is to build a portfolio of niche, profitable HealthTech businesses that dominate specific niches instead of chasing unicorn valuations.
The fund will concentrate primarily on unregulated or lightly regulated segments, including preventive care, digital therapeutics, remote monitoring, and productivity tools for healthcare professionals. These areas allow for faster iteration without compromising patient safety or regulatory compliance.
Central to the strategy is an approach increasingly referred to as “seedstrapping”. Instead of multiple funding rounds, the company typically raises funding once – usually below one million euros – designed to carry it to break-even within two to three years. The emphasis shifts from perpetual fundraising to early revenue, disciplined cost structures, and tangible customer value.
The ambition is not to create decacorns in a decade, but to build durable companies that grow steadily, generate cash flow, and become indispensable within their chosen niche markets. From a financial perspective, the fund targets returns in the range of 20%+ p.a. (IRR), driven primarily by cash-flow generation rather than valuation multiple expansion.
A Clinical Perspective on Innovation
Prof. Ahmed’s involvement adds a critical dimension to this investment framework. With more than thirty years of surgical experience across the NHS and international health systems, he brings a practitioner’s skepticism to technology-driven healthcare narratives.
For Shafi, innovation must address real systemic pressures. He highlights three in particular: workforce shortages, the rising burden of chronic disease, and the unsustainable cost of hospital-centric care models. Technology, in his view, is valuable only insofar as it helps improve patient outcomes or redistribute care more efficiently.
One concept he frequently returns to is the “housepital” – the gradual migration of care from centralized institutions into homes and communities. Enabled by remote monitoring, AI-driven diagnostics, and wearable sensors, this shift has the potential to improve outcomes while reducing costs. Shafi describes the current moment as a rare convergence of technological capability, patient demand, and regulatory openness.
Yet he is equally clear that adoption – not invention – is the real bottleneck. Healthcare systems change slowly, and solutions that ignore incentives, workflows, and culture rarely scale.
Building for Adoption, Not Just Technology
PurposeTech’s second fund reflects this also operationally. Roughly ten percent of capital is earmarked for venture building and portfolio-level support, aimed at helping companies navigate regulatory complexity, stakeholder alignment, and change management. The objective is to increase the probability that technically sound solutions achieve real-world uptake.
Looking ahead, PurposeTech envisions its second vintage – PT Capital – as the foundation of a regional HealthTech platform focused on preventive care and healthspan extension. Rather than a loose collection of investments, the portfolio is intended to function as an interconnected ecosystem, sharing capabilities, insights, and infrastructure.
The formal announcement of the fund will follow in January 2026. For now, the message is clear: in healthcare, realism may be the most radical strategy of all.
