Why Digital Health Startups are Booming Right Now
Let’s find out which unicorn startups are worth investing in.
As overkill as it sounds, the COVID-19 pandemic affected us in so many ways we don’t even know where to begin. But I want to place great emphasis on one area more than others — digital health.
In these trying times, let’s not also forget that other critical illnesses like cancer and heart diseases are still in need of healthcare. But all of our resources seem to focus on figuring out how to fight off a novel virus that’s spreading fast like wildfire. We realize our healthcare systems are in dire need of an upgrade. We need to keep up just like how mobile gadget companies are releasing out upgraded models now and then.
Sure enough, fundraising for digital health startups skyrocketed during the pandemic.
Current Trends for Digital Health Startups
As stated in Q1 2021 Funding Report on Digital Health Venture Investment by Rock Health, the total funding of digital health venture accelerated from $7.4B in 2019 to $14B in 2020! And although the trends were quite the same during the early months of 2020 and 2021, the trend deviated and bunched up in March 2021 raising a total of $6.7B. According to Rock Health, it’s their most funded quarter recorded to date. Take note that the research study was only conducted for U.S. digital health startups.
According to IGI Global’s definition, a digital health startup is:
“A newly founded company that aims to provide some sort of technological product or resource to the medical market, typically targeting medical practitioners, patients, insurance providers, or corporate roundtables.”
It just goes to show that a lot of innovators are brewing something for digital healthcare. And that investors are seeing these as opportunities for massive growth in the coming years.
Where to Find The Best Digital Health Startups to Invest In
There are a few ways on how to find a good startup company to invest in. I’ve talked about it in the Top 4 Ways To Find the Best Startup Companies To Invest In. For me, the easiest way to do it is using Crunchbase because it was made for tracking startup companies. You can also read my other post on how both investors and startup owners use Crunchbase.
But if you want to zero in on the top digital health startups, look out for CBInsight’s Digital Health 150 reports. Every year, Crunchbase ranks the “150 most promising digital health startups in the world”.
Out of almost 8,000 digital health startups, the 2020 Digital Health 150’s top 3 categories that make up the list are:
- Clinical Intelligence & Enablement: Companies working on software that automates data collection and routine communication. Paper documentation may be a simple task. But in this age, they’re more of a slow old-fashioned way of getting ahold of data when needed. Medical professionals make better outcomes when data is readily available.
- Screening & Diagnostics: Investors are also attracted to companies working on artificial intelligence (AI) across different industries. In healthcare specifically, some apps enable us to use our smartphones to help us diagnose certain diseases.
- Virtual Care Delivery: Digital health services like teleconsultations are on demand right now. Companies are developing apps powered by AI and automation to easily connect patients to healthcare providers.
The Best Unicorn Digital Health Startups to Look Out For (2021)
Investing in startups is not for the faint of heart. Investors take a great risk in supporting the startup, ride or die. But if you’re looking for more stable options, turn your attention to unicorn startups.
Unicorn startup is a term used by venture capitalists and angel investors for startup companies with at least a billion dollars in valuation. These businesses are for the type of investors who wants to get ready and meet the waves of opportunity. There’s a high chance of these companies going public and announcing their initial public offering (IPO). My favorite example was Tesla, Inc.’s IPO in 2010 at $17/share. Now, it’s almost 40x more than that!
According to CBInsights, there are more than 700 unicorn companies around the world as of June 2021 as told by CBInsight’s complete list of unicorn companies.
The United States is home to a lot of unicorn startups in digital health, with Biosplice Therapeutics as the largest. Their company deals with biotechnology with the end goal of finding better treatment for cancers, tumors, and degenerative mental illnesses like Alzheimer’s disease.
Next to the U.S. is China with WeDoctor as the largest. Their company claims to be the “world’s leading medical health technology platform”. They own a string of “internet hospitals” — China’s emerging innovation where patients go to the nearest medical institution and meet up with city physicians online. According to Bloomberg, WeDoctor is planning to announce its first IPO anytime soon.
In Germany, Ottobock Healthcare works on 3D scanners and printers to help orthopedic professionals to give better treatment to their patients. They have a platform called iFab where scanning, modifying, 3D printing, and robot fabrication are done efficiently to provide custom orthoses and prostheses to patients.
Meanwhile, Sweden has Kry which helps patients connect to healthcare consultations in just a few minutes with a mobile gadget. They also provide home delivery services, such as when patients order COVID-19 tests at home. Kry is one of the strongest leaders in the European digital health market.
Are Unicorn Startups in Digital Health Worth Investing?
If these digital health startups only want to prolong or save lives, it’s definitely worth investing. But knowing which digital health startup you should invest in particularly is another matter. Startups, even unicorn companies, are prone to failing. But I’ll say this again:
Find the right startups that you believe in. Invest in them without expecting too much in return. Continuously support and track them. Then who knows, maybe they’ll make it to the Fortune 500 list!