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Robust Funding Continues in Digital Health Space

Industry: Healthcare
Current: Macro-economic

The COVID-19 pandemic triggered massive disruption in the healthcare industry in 2020 and forced many healthcare businesses to adopt emerging technologies to ensure business continuity
The disruption necessitated accelerated investment in technology for the digital transformation of healthcare companies
In 2021, the Digital Health domain attracted more than $40 billion in venture capital funding, indicating 27% growth, a trend which is expected to continue given the increasing demand and consumer acceptance

Robust Funding Continues in Digital Health Space

While the world has been grappling with the aftereffects of the pandemic, the market has registered growth in digital adoption. With similar changes in the healthcare sector, digitalization seems well on course to become part of healthcare, rather than a short-term phenomenon in the current health crisis. Digital health has proven itself useful enabling people in self-isolation to access medical services without risking their lives and putting the lives of others at risk. It has also provided tracking and monitoring solutions that allowed governments to enforce policy to prevent the further spread of the virus.

Digital health makes use of the technology we use daily and generates data that make healthcare more effective. In recent years, countries have made significant investments in the digital health ecosystem. India is a recent addition to the digital health ecosystem. As part of the Union Budget 2022-2023, the Indian Finance Minister announced plans to launch a digital health ecosystem under the Ayushman Bharat Digital Health Mission (ABDM). To fund the platform, India increased its allocation to the National Digital Health Mission under ABDM from INR300 million to INR2.0 billion. It has also set aside INR400 million for the National Mental Health Programme. In October 2021, France announced a EUR650 million investment to accelerate its digital health strategy, which includes telehealth, preventive medicine, surgical robots, and artificial intelligence-based medical devices.

Venture Funding in Digital Health Companies

The increased adoption of digital health technology has resulted in accelerated venture capital funding in the space. Such venture funding deals have increased considerably in tech companies related to pharmaceutical and healthcare. The funding has increased 27% in 2021 as the total deal value reached $42 billion compared to $33 billion in 2020. The areas that have attracted investments range from biopharma, medtech R&D, and diabetes to telemedicine, home fitness setups, mental health apps, and fitness gadgets. With the increasing acceptance from consumers and increasing demand for digital health technology, it is likely that the trend will continue in 2022.

We highlight below some of the start-ups that have received funding in 2021.

Earlens Corp – Intelligent Platforms

Earlens Corporation is a medical device company that develops hearing solutions designed to change the current standard of care for sound performance. The company claims to have developed the world’s first Earlens Contact Hearing Solution that delivers sound directly to the eardrum. This revolutionary, non-surgical hearing solution uses a small lens to vibrate the eardrum, duplicating the natural hearing process. In August 2021, the start-up raised $21.23 million of its planned $35 million venture financing.

Genome Medical – Genomics

Genome Medical capitalizes on telemedicine to integrate genomic medicine into everyday health care. Through its nationwide network of genetic specialists and an efficient Genome Care Delivery technology platform, the company offers genomic testing services to consumers and healthcare providers in the areas of reproductive genetics, cancer genetics, cardiovascular diseases, and pediatrics; and direct to consumer tests for the assessment of the risk of various medical conditions. Led by Casdin Capital and Google Ventures, it raised $60 million in series C funding in August 2021.

Aetion – Coordinated Healthcare

Aetion provides real-world evidence (RWE) and outcomes-based analytics solutions to life sciences companies, payers, and at-risk providers. With its patented rapid-cycle analytics technology, the Aetion Evidence Platform uses the everyday clinical and financial interactions of the healthcare system to gain insights into the clinical and financial status of a population, measure and compare the effectiveness and value of treatments and provider practices and realize value-based contracting. In May 2021, it secured $110 million in Series C funding led by Warburg Pincus with participation from B Capital and Foresite Capital.

Tyto Care – Mobile Health

Tyto Care is a mobile and web-based health platform and device that allows users to perform a self-physical examination and remote diagnosis. In March 2021, it raised $50 million in an oversubscribed series D extension round of financing led by Insight Partners, with participation from Tiger Global Management LLC, Qumra Capital, Qualcomm Ventures LLC, Olive Tree Ventures and Shenzhen Capital Group Co Ltd.

Noom – Health & Wellness

Noom is a psychology-based digital health platform that offers exercise coaching and nutrition support to customers with chronic health conditions such as hypertension and diabetes. It raised $540 million in series F round of financing led by Silver Lake Management LLC in May 2021.

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