There are 36 Blue Cross/Blue Shield groups in the country, some covering multiple States, but the Massachusetts group has decided to go it alone. As part of this independent effort, Blue Cross/Blue Shield has established a wholly-owned subsidiary, Zaffre Investments, that invests in healthcare funds and also makes direct equity investments. Additionally, Zaffre also incubates a few companies at Zaffre’s own facilities.

Who should look to Zaffre for potential funding? Zaffre has a long term view of things: it asks, can this technology assist in the efficient delivery of healthcare over time? This sometimes creates some “interesting discussions” when Zaffre makes an investment along with professional investors (venture capital or private equity) with a shorter time frame to exit, according to Vice President for Investments Steve Fox, speaking at the June 24 Boston meeting of Sky Ventures (a platform for the presentation of emerging life sciences and healthcare companies).

Generally, Zaffre does not invest in device companies, nor in drugs and pharmaceuticals. They are looking for service and IT companies that support a service model focused on outcomes. They have an interest in consumer-driven health including health wellness, telemed, caregiving; and, in big data analytics.

Beyond that, Zaffre is all over the place, but to good effect. They will invest anywhere between $50,000 and (as part of a syndicate) $20,000,000. They do not seek control. They are stage-agnostic; they will do seed, early rounds, growth rounds, mature companies. They will lead or follow. Their geography is the United States. They do seek a board seat. They promise networking opportunities “through the front door” by direct access.

According to Fox, Massachusetts Blue Cross/Blue Shield, as a one-State non-profit, needed to diversify its revenue stream. Hence, a broad platform for investment.