Sheba Sells Innovation Arm ARC to Redesign Health

The agreement involves knowledge transfer in managing innovation centers. ARC will continue to operate innovation centers within Sheba and other medical centers globally, retaining its stakes in portfolio companies. However, the management of the global network and the rights to establish new innovation centers will transfer to the merged entity.

Redesign Health, a platform for creating medical startups and raising capital, operates similarly to ARC. It has experience with institutions like the Cedar Sinai Hospital in the US. The proceeds from the sale will go to Sheba, with the state receiving approximately 10% as per existing agreements on intellectual property transactions. This merger aims to combine Sheba's clinical, technological, and research capabilities with ARC's innovation experience and Redesign Health's expertise in company building, investment, and international expansion.

ARC was established by Sheba in 2019, based on the principle that significant healthcare innovation can emerge from within the system itself. Its model connects doctors, medical staff, managers, entrepreneurs, tech companies, and investors. ARC currently supports over 130 startups, including three unicorns, with a portfolio valued at approximately $6.7 billion. These companies have raised over $1.5 billion and achieved eight exits, such as the $330 million sale of Belkin Vision and the $300 million sale of Innovalve.

ARC's model has expanded into an international network operating in 12 countries, encompassing 31 health systems and over 300 hospitals. Following the merger President of ARC Global, will become Vice Chairman of Redesign Health. Dr. Steven Classco, former CEO of Jefferson Health, will be appointed Chairman of the Board of the merged company. Redesign Health, founded in New York in 2018, specializes in building health companies and developing technological solutions for medical systems, integrating venture capital, engineering, AI expertise, and company-building experience.

This move occurs amid global healthcare pressures, including staff shortages, rising costs, and the need for rapid adoption of new technologies like AI. Many technologies struggle to move beyond pilot phases into widespread implementation. The merger is designed to bridge this gap by starting within the healthcare system itself: identifying clinical or operational problems with healthcare professionals, developing tailored solutions, building companies around them, investing, implementing, and then expanding successful solutions to other global health systems. Prof.