Visit Investors & Advisors Site | Support |
  • Australia

  • Austria

  • Denmark

  • Finland

  • Germany

  • Iceland

  • Italy

  • Luxembourg

  • Netherlands

  • Norway

  • Spain

  • Sweden

  • Switzerland

  • United Kingdom

  • United States

  • Location not listed

Sustainable Investing

Benefiting Humanity: How Venture Capital Helps Improve Our Well-Being

04/08/2024

Key Takeaways

Healthcare and climate-change challenges constitute key 21st-century obstacles for human welfare.

Problem-solving entrepreneurs increasingly attempt to overcome these obstacles with breakthrough solutions. But they often lack the resources to fully realize their visions.

Venture capital can bridge the gap between their promising inspiration and real-world implementation. Its growing importance is vital to helping clear the complex healthcare and climate hurdles we face.

In 1996, Adam Heller, a University of Texas chemical engineering professor, and his son, Ephraim, formed the startup TheraSense. Four years later, the Hellers developed the first painless glucose monitoring device – named FreeStyle – for diabetics.

Four years after that, Abbott Labs bought TheraSense for $1.2 billion. And in 2023, Abbott sold $5.3 billion worth of Freestyle Libre continuous glucose monitors – deemed by one leading human health foundation as the “Best Medical Technology” of the past 50 years.1,2,3

Freestyle Libre’s path to iconic status from a professor’s drawing board in less than three decades has transformed diabetes care worldwide. But without venture capital, it may never have progressed much further than the Hellers’ imaginations.

Not long after the Hellers founded it, TheraSense in April 1997 received its first round of venture capital funding, consisting of a relatively modest $5.6 million.4 But by October 2001, when the company went public, it had a market value of $722 million.5

The Hellers’ ingenuity spawned a massive improvement in the treatment of the world’s ninth-leading cause of death. But it was their access to needed financial resources that made it possible.

Improving global health outcomes remains a vital objective of humankind, as does arresting the problematic pace of climate change. The two, of course, are inextricably interconnected, and venture capital – perhaps more than ever – commands an important role in addressing them both.

Human Welfare Challenges in the 21st Century

Since 1900, the global population has more than quadrupled to 8.1 billion.6 Life expectancy in that time has more than doubled.

Billions of more people living much longer than at any point in recorded history require increasingly more resources, including means of caring for them. Humans now consume 13 times more energy and six times more water than they did at the dawn of the 20th century. In the process, carbon emissions have ballooned by a factor of 16.7

Those strains fall especially hard on our climate and our healthcare system.

Dwindling natural resources have compromised food and water security. Moreover, the process of extracting and employing them has contributed to rising global temperatures and somewhat more extreme and unpredictable weather. About 40-45% of the world’s population live in areas deemed vulnerable to the impacts of climate change.8

Meanwhile, soaring healthcare costs reflect, in part, the growing demands of caring for a society that simply is living longer than it ever has. That care includes battling cancer and chronic diseases, ailments that don’t disappear even as emerging pandemics present new threats. Global deaths from chronic diseases could reach 67 million annually by 2030 – a 34% increase in just two decades.9

Hunting Innovation

The need to address these challenges has not gone unnoticed. Scientists, researchers, engineers, government interests and entrepreneurs all have actively engaged in a ceaseless effort seeking innovative solutions.

In healthcare, those efforts broadly center on biotechnology and therapeutics. In addition, they involve creating new or enhanced medical devices, life-science tools, diagnostic equipment and drug delivery mechanisms to improve outcomes across the healthcare spectrum.

Those outcomes, of course, encompass saving and improving lives via better treatment of life-altering conditions. They also include reducing the costs of both specialized and routing healthcare for individuals and society as a whole.

A similar cohort seeks more efficient use and consumption of natural resources while expanding access to them. At the same time, limiting the detrimental impacts of obtaining and using those resources, which may involve transforming the markets for them, remains an evolving objective.

Furthering that approach requires improved methods of water use and conservation, environmental-friend agricultural and industrial production, waste elimination and cleaner, renewable energy generation.

Startups: Targeting a Wide Range of Solutions

Claros Technologies* exemplifies a startup attempting to benefit human welfare through cutting-edge innovation. The company sits at the intersection of climate and healthcare improvements.

Founded in 2018, Minneapolis-based Claros aims to eliminate the impact of toxic chemicals called polyfluoroalkyl substances, known collectively as PFOAs, PFOs and PFAs – so-called “forever chemicals.”10,11 These materials appear in 99% of American products, and exposure to them has been linked to cancer and weakened immune systems.

Chemical and manufacturing giant 3M reached a $10.3 billion settlement last year that resolved about 4,000 lawsuits suits by U.S. states and municipalities. over contaminated drinking water from forever chemicals. Rival chemical manufacturers, including DuPont, agreed to pay $1.2 billion in a similar settlement.12 Not surprisingly, U.S. regulators aim to eliminate these substances.

Through its nanotechnology, Claros has developed non-toxic materials resistance to ultraviolet rays and odors for use in various commercial applications. It also has developed technologies to destroy PFAs and remove and recover high-value metals.

Having raised $24M, Claros is in the early stages of commercialization, as are hundreds of other firms promoting myriad climate and healthcare solutions.

Many of those solutions involve artificial intelligence, which eventually could quicken drug development and enhance communication between providers and consumers. Medical technology companies also have employed AI in next-generations diagnostic equipment, surgical robots and remote-monitoring devices.13

Startups also have begun targeting the burgeoning obesity drugs market. They’ve made progress on existing biology, developing treatments for side effects of current medications and pursuing entirely new approaches.

And even amid Freestyle Libre’s dominance in the glucose monitoring market, several small, private firms have focused on expanding that market. That effort involves introducing glucose sensors for nondiabetics and those who don’t regularly take insulin injections.14

Discover American Century’s Approach to Venture Capital Investing

Venture Capital’s Role

Venture capital has played a pivotal role in allowing fledgling startups to flourish – and promises to continue doing so.

Between 1978 and 2020, companies employing capital from venture investors accounted for 92% of all research and development and 81% of all patents awarded in the U.S.15

Since 2020, climate and healthcare have attracted substantial attention from venture capital investors:

Climate
  • $117 billion raised in the U.S.

  • 3,332 deals

Healthcare
  • $80.6 billion raised in the U.S., U.K. and E.U.

  • 2,182 deals

It is clear that investors recognize impact investing as a means to spur positive environmental and social development to better serve all people and the planet.
Global Impact Investing Network, 2022 Market Sizing Report¹⁶

Government support aids investors’ capital in both areas.

The U.S. Inflation Reduction Act of 2022 allocated $370 billion in funding to mitigate climate change, while the E.U. Green Deal potentially could dedicate more than $1 trillion in public and private funds to the effort, pushing annual investment to a projected $9-12 trillion by 2030.17

In healthcare, two relatively new U.S. agencies, the National Center for Advancing Translational Science and the Advanced Research Projects Agency, work to support research and accelerate the development process.18 Meanwhile, the leading governmental innovation arm, the National Institutes of Health, devotes the vast majority of its $48 billion annual budget to medical research.19

Transforming Lives

A startup such as Claros may or may not turn into the next TheraSense, transforming the lives of tens of millions of people and raising the bar for human welfare.

What is clear, though, is that if it even comes close, venture capital will have played a key role in the success and achievements of both.

More broadly, these two examples represent a microcosm of the importance venture capital plays in a world trying to 1) negate and reduce the effects of climate change and 2) improve healthcare outcomes while making the means of obtaining them less costly. Going forward, the lines between our health and the natural world around us may increasingly overlap.

Venture capital doesn’t trigger the ideas and research that can improve the well-being of the human race. Undoubtedly, though, it’s the runway from which those innovations take flight. Its role will remain paramount as society seeks to improve and enhance climate and healthcare outcomes.

Managing Money, Making an Impact

Learn more about how we help our clients Prosper With Purpose®.

Freya Preimesberger, "UT professor co-invents bloodless diabetes device," The Daily Texan, November 4, 2026.

Sean Whooley, "Abbott FreeStyle Libre named ‘best medical technology’ in last 50 years by Galien Foundation," Drug Delivery Business News, October 28, 2022.

Adam Heller, The Electrochemical Society, March 2024.

"Diabetes company TheraSense raises $114 million in IPO (initial public offering)," Clinica, October 15, 2001.

Paolo Malanima, "World Energy Consumption A Database, 1820-2018," 2020.

"Summary for Policymakers Headline Statements," IPCC, February 28, 2022.

"Climate change," World Health Organization, March 2024.

"Claros Technologies," CB Insights, March 2024.

"About Claros Technologies: Innovating for a Sustainable Future," Claros Technologies, March 2024.

Lisa Friedman and Vivian Giang, "3M Reaches $10.3 Billion Settlement in ‘Forever Chemicals’ Suits," The New York Times, June 22, 2022.

"Global Healthcare Report 2024," Bain Capital, January 2024.

Rebecca Springer, Ph.D., "17 key takeaways from the 2024 J.P. Morgan Healthcare Conference," PitchBook, January 13, 2024.

Gornall and Strebulaev, "The Economic Impact of Venture Capital: Evidence From Public Companies," 2021.

"2022 Sizing the Impact Investing Market," Global Impact Investing Network, October 2022.

Fredrik Dahlqvist, Sean Kane, Lisa Leinert, Maximilian Moosburger, Anders Rasmussen, "Climate investing: Continuing breakout growth through uncertain times," McKinsey Sustainability, March 13, 2023.

Margaret Anderson, Dr. Kimberly Myers, Nina Gonzalez, "Unlocking the potential of biomedical innovation: The crucial role the government and partnerships play in accelerating progress," Deloitte, May 23, 2023.

"Budget," National Institutes of Health, October 24, 2023.

Many of American Century’s investment strategies incorporate sustainability factors, using environmental, social, and/or governance (ESG) data, into their investment processes in addition to traditional financial analysis. However, when doing so, the portfolio managers may not consider sustainability-related factors with respect to every investment decision and, even when such factors are considered, they may conclude that other attributes of an investment outweigh sustainability factors when making decisions for the portfolio. The incorporation of sustainability factors may limit the investment opportunities available to a portfolio, and the portfolio may or may not outperform those investment strategies that do not incorporate sustainability factors. ESG data used by the portfolio managers often lacks standardization, consistency, and transparency, and for certain companies such data may not be available, complete, or accurate.

No solicitation, offer, or distribution of any investment, security, financial instruments, or financial interest of any type is being made or is intended by any of this material. This material is provided for informational and educational purposes only.

Nothing herein constitutes a recommendation of any investment, security, financial instruments, financial interest of any type, or any investment strategy.

No representation or warranty is being made regarding the suitability of any investments, securities, financial instruments or strategies for any investor. The material on this site is provided “as is.” American Century does not warrant the accuracy of the materials provided herein, either expressly or impliedly, for any particular purpose and hereby expressly disclaims any warranties or merchantability or fitness for any particular purpose.

References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.