HBI Deals+Insights / Digital and AI

Digital health: The winners are still unclear

Despite big increases in funding for digital health operators it is still far from clear who will be the winners. Many major players still have revenue of €5-8m.

In the first half of 2019 venture capital funding for digital health rose roughly 50% to $5.3bn, of which $4.5bn was in North America and just $716m in Europe.

Nooman Haque, Silicon Valley Bank says it is still too early to say who the winners will be. “Yes you can look at Babylon and say it has just raised over $500m but there are plenty of people who would argue that this doesn’t mean it will be the winner.”

He says that in most areas of digital health, national regulations make an international rollout like Spotify did impossible. “Payors and health systems vary so much that each country is different.”

He says that digital health then remains still dominated by national markets. You might expect big US players who have achieved mass-scale to then acquire in Europe and this has happened in some cases such as NYSE-quoted Teladoc. But he argues that most European digital health operators are still trying to build strength in their national markets. He also says that often platforms are incompatible and so acquisitions may not make sense.

Internationalisation is easier in AI and big data-powered drug discovery plays or companies which are using big data to explore the genome than for tools which seek to create patient engagement or map patient pathways which are culturally and nationally determined.


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