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Healthtech : What’s Going On? (Pt I)

healthtechphoto

By : Trista Bridges

‘Disruption’ tends to come first to the more easily disruptable fields. Lodging, transportation (i.e. taxis), b-to-c commerce, telecommunications – the rise of the internet and now mobile age have ushered in game changing innovation that has had an indelible impact on our daily lives. The area of health technology has been somewhat of an exception. Given the complexities of healthcare delivery (i.e. various types of healthcare systems around the world, a wide array of stakeholders, long product development and commercialization cycles, etc.), it’s hardly surprising that full-throttle disruption has yet to come to healthcare.

 

A Turning Point

This may be about to change. ‘Healthtech’, defined as ‘technology (databases, applications, mobiles, wearables) to improve the delivery, payment, and/or consumption of care’, has started to pick up steam. ‘Healthtech’ investments have grown healthily in recent years, with a particularly impressive jump over the last year, and future prospects for the sector continue to be bright. Here are a few highlights :

  1. Through end-2015, venture funding has grown 200%, totaling an estimated US$11.7 billion into Healthtech businesses from over 30, 000 investors in the space1
  2. In 2016, a record 296 companies were funded, posting an increase of 8% y-o-y. Although the total investment dollars, which reached $4.2B, were down slightly versus the previous year, the majority of deals were early stage, providing a solid pool of future healthtech leaders2
  3. Digital health companies in the genomics and sequencing space topped investors’ priorities in 2016, with big data and analytics, wearables and biosensing also posting solid gains2
  4. The global Healthtech market is expected to triple in size from an estimated $60.8bn in 2013 to $233.8bn in 20203
  5. While there are estimates that tele-health will generate the fastest growth ’13-20 period (48% CAGR), wireless health (i.e. integration of wireless technology with traditional medicine) is expected to generate the most value at $79.5B4

 

Engaging the Healthtech Ecosystem

Despite the fact that growth in the sector has been impressive as of late, it continues to be immensely challenging to predict how this rising technology will impact the healthcare sector. Thus, it’s important to turn to emerging Healthtech players, who often have a more robust vision of the possibilities these technologies offer, for their input. If you’re outside the ‘Healthtech startup ecosystem’ however, it can be difficult to get‘in the know’ on the latest trends and happenings in this fast-growing space. In comparison with other areas of innovation, healthcare innovation continues to be one of the most elusive. The problem is that many of these new technologies are not easily explainable, don’t (yet) have a clear value proposition, and don’t neatly fit into the healthcare delivery flow. This is set to change in a big way in the coming years. It’s becoming increasingly evident that emerging Healthtech innovations will fundamentally change health-care delivery. In time, we’re likely to see that established lifescience companies who opted for an early engagement strategy with Healthtech innovators, reap substantial benefits and win in the long-term.

What are some easy, practically ways to start this process? Over the course of three articles, we’ll explore ways to deepen your knowledge of the Healthtech ecosystem and, ultimately, increase your engagement. Next time in part II, we’ll startby taking a closer look at the funders, namely venture capital funds and other early stage Healthtech investors.

 

Trista Bridges is a Senior Associate with CapSys Group. She’s worked with clients across various sectors, including life sciences, consumer products, and technology. Her areas of focus are capabilities development, strategic planning, and startup and healthtech ecosystem engagement.

 

Sources:

Hottopics, “What is healthtech and how will it continue to evolve”

Rockhealth, “2016 Year-end Funding report a reality check for digital health”

Healthtechinsider, “2016 Starts strong for healthtech investment”

Topfunded, “Healthtech investment in tomorrow’s digital healthcare system”

 

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