Verstandig, who previously founded Rally Health, believes there is still significant opportunity for better software in the healthcare sector. In the defense sector, the firm is incubating companies that come up with innovative ideas, with former Defense Secretary Mark Esper as one of the partners. One such company is DefConAI, which uses machine learning to optimize logistics for military operations. Red Cell's investments are overseen by Roger Ferguson, former Vice-Chairman of the Federal Reserve.
Key takeaways:
- Red Cell Partners, led by CEO Grant Verstandig, has raised a $91.2 million fund, bringing its total dollars raised to over $200 million. The new capital is aimed at pre-seed investments of up to $5 million for companies it is incubating as well as follow-on investments in later rounds.
- The firm is focusing its investments in two primary areas; healthcare and defensetech, with an eye towards opportunities in artificial intelligence and machine learning. Its goal is to have those companies emerge from stealth in less than two years with contracts in hand to start generating revenue quickly.
- One company that Red Cell has incubated in the defense space is DefConAI, which uses machine learning algorithms to optimize logistics for military operations, including combat. It recently secured a new contract with the Air Force to advance the development of its models.
- Red Cell’s investments are overseen by chief investment officer Roger Ferguson, a former Vice-Chairman of the Federal Reserve, who is currently on the board of Alphabet. This role is his first foray into venture capital.