One of Georgia’s largest hospital operators is joining a wave of companies looking at Midtown for technology innovation and entrepreneurial mojo.
Catalyst by Wellstar, the innovation arm for Wellstar Health System, confirmed Monday it will open a health tech incubator in Tech Square this fall. The company will offer nearly 8,000 square feet of coworking office space to budding startups looking to break into the health care industry.
Surrounded by more than a dozen other incubators and supported by Georgia Tech, Catalyst’s operation in Midtown will anchor its recently announced $100 million venture capital fund, which is looking to invest in early stage health care startups.
“We believe innovation and Atlanta’s startup ecosystem are critical to positively impacting the future of healthcare in all communities by helping us solve the critical problems we face,” Dr. Hank Capps, president of Catalyst and a top Wellstar executive, told The Atlanta Journal-Constitution in an email.
Catalyst will lease space within the Centergy One Building at 75 Fifth Street NW and expects to open in October, as first reported by the Atlanta Business Chronicle. The building is already home to a technology incubator tied to Georgia Tech and Engage, a venture fund that pools and invests money from corporate partners. Cox Enterprises, which owns The Atlanta Journal-Constitution, is one of Engage’s partners.
The influx of activity by Catalyst comes just months after Wellstar closed two metro Atlanta hospitals that largely served poor and Black patients, citing financial reasons, a move that inspired a large backlash. Wellstar is also negotiating to take over Augusta University Health System.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Closing Atlanta Medical Center removed Wellstar’s primary presence in Atlanta, leaving the system with hospitals only in the capital’s suburbs or other cities. By locating its investment fund in Midtown, Wellstar would be placed near other centers of medical innovation around the Georgia Tech area and rebuilding some of that connection, albeit in a more affluent part of the town.
Capps told the AJC that Wellstar is providing the full $100 million for Catalyst’s investment pool, adding that “No funds were diverted from patient care, from our communities or from team members to this venture investment fund.”
The health system considers the fund as a non-traditional part of its investment strategy. The venture funding is a portion of dedicated investment capital and any revenue from the fund will be treated as nonprofit revenue, as long as it is used to support Wellstar’s charitable mission.
“As a not-for-profit organization and the largest provider of uncompensated and charity care in Georgia, Wellstar is committed to reinvesting funds generated by this venture to enhance our ability to provide the highest quality health care to our communities,” Capps continued.
Catalyst has already invested more than $1.8 million in four companies, none of which are Georgia-based. The businesses range from a maternal health startup to an antimicrobial LED light manufacturer. Wellstar is among those company’s customers.
More details on the Midtown incubator and its operations will be made available in the coming months, Capps said.
— Staff writers Ariel Hart and Mirtha Donastorg contributed to this report.
