The wellness opportunity post-COVID-19
During uncertain times there is a tendency to turn inward, to hold on to what one has, and to avoid risk. With every crisis there is an opportunity, and many world class companies including half of the world’s Fortune 500 organizations were built during economic downturns. Today wellness entrepreneurs in Israel have used this uncertainty to develop solutions to combat COVID-19. Practical solutions to fight the coronavirus are only one aspect of wellness tech, and this vertical has grown to include several sub-verticals. Therefore, we view our work in this ecosystem as not just an investment but also a contribution in combating the greatest global health challenge of our generation.
We believe that the forecast for the wellness economy will be even stronger post-COVID-19 as the virus and the lifestyle changes it has brought have awakened a worldwide awareness to the importance of health and wellness. This is not just happening on a consumer level, but on an enterprise level as well as we will see an increasing number of global corporations using wellness technology to improve the well-being of their employees. Israeli startups are on the forefront of this trend and have proven themselves as highly capable during one of the most difficult and bizarre economic periods in modern history.
When looking at a global overview of health and wellness startups, the Startup+Health-2019 Year-End Report states that “total funding in health innovation funding in 2019 was $13.7B ($1.7B in wellness).” It’s important to note that this number could increase this year due to the health challenges that COVID-19 has brought. As of Q1 of this year the total funding in health innovation was $3.5B (with a 41% increase compared to Q1.2019) according to this startup report. While economic factors have hit certain industries hard such as travel and hospitality, we are confident funding towards health-related innovation will increase.
Israeli wellness ecosystem
COVID-19 is impacting every industry globally, including the Israeli ecosystem, but as indicated by the recent Intel and Microsoft deals there is still an appetite for Israeli tech even during this crisis. As other tech ecosystems go through changes it’s worth noting that as of this writing Israel’s ecosystem boasts around 6,000 startups and over 9,000 active tech companies (according to Startup Nation Central and IVC Research, respectively). To give context to the previous year during 2019 there were 44 rounds with total funding of $8.1B, and pre-COVID-19 capital raising in Q1.2020 stands at $2.6B, according to Startup Nation Central.
When it comes to a digital health overview, according to Startup Nation Central 600 Israeli startups in 2019 raised over $850M in 95 rounds. This year in Q1 ended with fundraising of $176M over 12 rounds. Regarding wellness startups there are 500 startups in the ecosystem with over $275M in fundraising in 2019 (and over $70M fundraising since the beginning of 2020). These numbers point to the health and growth of the ecosystem even during the current COVID-19 crisis.
What began as a small and focused vertical gained breakaway success with startups such as Headspace, Talkspace, and Hims/Hers, health and wellness tech has quickly grown into numerous sub-verticals in order to address emerging needs. Some of these verticals have become more relevant due to COVID-19 and some will have to find their footing in this new coronavirus economy. Below we’ll offer an overview of several of the verticals that are making up the wellness ecosystem and their relevance today:
Mind + Body: Aside from the virus’s attack on our immune system our mental health has suffered, and as such Israeli entrepreneurs are coming up with practical solutions. We’re entering an era where our mental health will be viewed as important as our physical health.
Personal Care: Just because people are stuck inside their homes doesn’t mean they will stop taking care of themselves, alongside the beauty industry this area is still growing. If anything, taking care of one’s self impacts our mental health as well thus making technology solutions in this area vital.
Healthy eating habits: As we saw in the death rate caused by COVID-19 in the US, weight related diseases such as diabetes was one of the major pre-existing conditions. Along with sleep and regular exercise, healthy eating is one of the most important lifestyle choices we can make, and tech offers us solutions to simplify this aspect of our lives.
Senior tech: The most vulnerable population at risk which includes wide swaths of the population. Whilst medicine has enabled us to live longer, what is important is improving the quality of life of those in their golden years with practical technological solutions.
Preventative/personalized medicine: This has become the future of medicine along with the widespread use of IoT and better understanding of data. If we can preempt many diseases, we’ll be able to significantly improve our standard of living.
While the world is still in a state of panic because of the current health crisis, bold entrepreneurs in Israel are facing this threat head on. The chutzpah of the Israeli ecosystem along with the rise of wellness as a vertical are positioning Israel to be the next powerhouse in this area. It’s not just about investing in local Israeli startups but in joining entrepreneurs who are solving some of the globe’s most pressing needs.
Welltech1 invests in and accelerates wellness startups with the goal of increasing viability, seeking additional investment and connecting to global partners immersed in the wellness market. Welltech1 provides startups with the know-how to scale, a dedicated professional team of wellness experts, business advisors, and global partners a gateway to accessing the global $4.5 trillion wellness market. To learn more click here.