3 Areas Where Investors Are Putting Cash Into Health Tech

04 Aug 15 | Author Sarah Gill | Software & Services

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Investor confidence in health tech opportunities continue to climb, with StrategyEye tracking USD1.8bn worth of funding coming into this space globally so far this year. Based on current trajectories, that figure suggests investment in health tech is easily on track to surpass last year’s total of USD2.3bn as the number and scope of companies seeking to raise money in the space increases. Rising optimism is highlighted by news that US regulators have just approved an epilepsy drug manufactured by 3D printing, also pointing to the opportunities for greater personalisation in medicine thanks to new technology. The move is likely to encourage more developers to start getting creative in the space, which can only be a good thing for an industry that is struggling to serve patients with outdated and inefficient systems.

With more money coming into the sector, where’s it all going? These are the top investment trends so far this year.

1. Elderly Care

While warnings about ageing populations in countries like the US and UK are a headache for governments that will see new strains on their budgets, the shift in demographics is creating a big opportunity for tech companies offering services catering to the elderly. A range of investments this year highlights the different ways in which technology can help solve issues ranging from access to healthcare services and pharmaceuticals to being able to live independently for longer.

One direct example is Honor, which picked up USD20m for its elderly care platform that is designed to keep senior citizens living in their own homes for as long as possible. The firm matches individual needs to a network of partner care services and has a big focus on feedback, with families able to see who’s visiting their relative and what activities they did and for how long through an app. Meanwhile, the relatives themselves have a device to tell them who’s coming and where they can leave feedback, with the idea that they stay involved in their own care.

The firm issued a rallying call for more innovators to turn their minds to this topic earlier this year: “Entrepreneurs have found it difficult to innovate in the senior space, and investors have not poured in enough dollars because of long-held misperceptions about older adults’ abilities to adopt and use technology. This needs to change. The world’s aging parents need more people to dream bigger and bolder.”

Companies operating in a similar space that also raised funding this year include Caremerge (USD4m) and we only expect more investments in this space as demand for cohesion across a fragmented care giver industry grows.

2. Fitness & Wellness

Ironically, investors think that technology – which is arguably responsible for many of our health problems related to a lack of exercise at least – could also help solve them. In this sector, wellness is a buzzword we’ll be hearing more of over the next year as companies look to cash in on increasing demand for self-improvement. So far this year we’ve tracked investment in US-based Arrivale (36m) and Jiff (USD23m), as well as Singapore’s CXA (USD8m) to name a few. The engagement with enterprise is interesting, with Jiff and CXA both looking to integrate with corporate health benefits and existing welfare programmes – a big industry in the US.

Another key trend in the fitness sector is investment in apps offering access to classes and gyms on demand. Fitmob picked up USD5m at the beginning of the year and was not long after acquired by New York rival ClassPass, which picked up USD40m in the same month and operates a subscription service for unlimited access to classes. This trend is mirrored in Asia, though investments are smaller, with India’s Gympik scoring USD135,000 and Malaysia’s KFit picking up first seed funding from investors including 500 Startups (which has a footprint there) and then a USD3.3m seed investment from Sequoia.

3. Dismantling The Doctor’s Surgery

The doctor’s surgery is the axis upon which the administration of local healthcare turns, but for many patients long waiting lists, difficulty getting to the practice and inconvenient appointment times means the model is no longer fit for purpose. There are various strands of technology that are, however, potentially able to make an impact here.

The first is solving issues of physical access, which affect the elderly, the very sick, people that rely on community or public transport and anyone working during opening hours. This is where the growing field of tele- and video-based medicine is flourishing. This year we’ve seen backing for Finland’s MeeDoc, which picked up just under USD4m for video call-based consultations and also sees an opportunity in enterprise customers. According to stats cited by founder and CEO Mikko Kiiskilä, nearly three-quarters of visits could be treated by phone.

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It’s not the only company that’s picked up funding in this space, with New York’s Sherpaa picking up USD6.25m this year for doctors-on-demand, providing healthcare consultations via smartphone and offering advice on insurance. Meanwhile there’s women-focused virtual clinic Maven for video-based consultations and prescriptions and online pharmacy PillPack, which just hauled in USD50m.

While the nature of existing healthcare services in most countries means that disruption is a slow and painful process, it’s likely that with investment coming into the space more entrepreneurs will start answering Honor’s call to start leveraging tech to improve and democratise access to healthcare.