Business

KC-based DST Systems eyes health care startups with California group

Based in Kansas City, DST Systems Inc. provides technology and services to companies in the financial and health care fields.
Based in Kansas City, DST Systems Inc. provides technology and services to companies in the financial and health care fields.

Kansas City-based DST Systems Inc. has paired with a California venture capital firm with a plan to create or back new businesses with a focus on big data and innovation to improve health care.

Frost Data Capital, in San Juan Capistrano, Calif., combines a business incubator program that supports startups with its venture capital investment funds. It teams with partners, in this case DST, to come up with ideas for new businesses and launches them.

In an announcement, the companies said they plan to launch or back two to four health care startups in the next 12 months. These new businesses would form with the idea of accelerating innovation in health care and advancing analysis of big data in the field.

DST already works with health care companies by providing various services and advice through DST Health Services and Argus Health Systems. Argus, also based in Kansas City, helps clients with pharmacy claims processing and other services.

Marc Palmer, president of Argus, said DST would invest in the Frost Data fund backing startups, contribute to ideas for businesses and provide leadership for the efforts. As a preferred partner, DST would be in a position to perhaps buy a startup company generated through Frost Data’s programs.

“For the most part, we’re not driving this,” Palmer said. “This is about trying to innovate.”

Palmer said working with Frost Data frees the effort to create new ventures from the demands on a large publicly traded company like DST.

“To create true innovation, you’ve got to get an environment where true innovation can occur,” Palmer said.

DST has a history of investment in young companies. For example, it was an early investor in Leawood-based Euronet Worldwide Inc., which operates a global network of ATMs and provides electronic payment and money transfer services, including a venture with Wal-Mart Stores.

Last year, DST invested in a Kansas City-area startup called CouponCloud, which was in the SparkLabKC accelerator program.

Mark Davis: 816-234-4372, @mdkcstar

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