It’s no small secret that overall VC/PE investments are down due to the COVID-19 pandemic. However, one area that has seen a boost in investment is healthtech.
Over the course of the past three months, only 541 VC deals were made in the seed to Series B stages, compared with 964 deals in the same period in 2019 – a 44 percent decrease in deals. The change varies across investment types, having the biggest impact on seed-stage deals, which dropped by 57 percent (down from 483 deals in 2019 within the three-month time period) to 209 deals in the March-June 2020 period. And data plays in Healthtech have seen the biggest boost.
Some recent examples include:
- Virtual care innovation: Ro nabbed a $200 million series C funding round led by existing investor General Catalyst and with significant participation from investors FirstMark Capital, Torch, SignalFire, TQ Ventures, Initialized Capital, 3L and BoxGroup. The startup has raised a total of $376 million since its founding in 2017.
- Accelerating new drugs: Artificial intelligence-based drug discovery platform Atomwise scored $123 million in series B funding led by B Capital Group and Sanabil Investments. DCVC, BV, Tencent, Y Combinator, Dolby Family Ventures and AME Cloud Ventures also participated in the funding round.
- Precision medicine: Sema4, a patient-centered health analytics company, scored a $121 million series C round led by BlackRock. Deerfield Management Company, Moore Strategic Ventures, Section 32, Oak HC/FT, Decheng and Connecticut Innovations also participated in the round. Sema4 was spun out of the Mount Sinai Health System in June 2017. The company is now valued at over $1 billion.
- COVID-19 tracking: Pacira BioSciences’ investment in Avalon.Ai. Avalon.Ai is an AI-based enterprise software and data analytics company that supports business, government, educational and healthcare silos. Its AI solution with data analysis generates an accurate, by-the-minute heat map analysis of the areas most affected by COVID-19.
COVID-19 continues to have a major impact on the global community, and as the virus continues its spread it’s imperative that medical and governing authorities have access to real-time insights to better inform action plans around emerging pandemic hotspots. Leading organizations know this and firmly grasp the benefits of bioinformatics and the use of data to generate better patient outcomes.
A look at the data by industry shows there is a different trend in each sector across investment types.
The applications beyond Covid-19 contact tracing and opioid technology just scratches the surface for some of the currently available healthtech data companies coming to market. Unlike many of the Covid-19 contacting tracing technologies available today that have either put together existing technology to create a simple app with very little depth or only have one application, the technologies that will see the most long-term success post-pandemic will have multiple applications and proven innovation in working with trusted organizations including the CDC.
Technology that applies to multiple disease states like diabetes, cardiovascular disease, cancer, and hundreds more are looking to transform the healthcare industry with their ability to quickly identify patient populations for clinical trials, to redefining the metrics in the delivery of care, and follow-up and overall treatment success.
How this new era of healthtech integrates into everyday workflows is also very innovative. In the past, scraping data was more abstract and from public entities. New technological models do things like integrate user interface with key variables to provide robust and accurate predictive analytics, which is unprecedented and completely innovative. This model is the future for healthtech, whereas the companies doing contact tracing now with basic tech will most likely crash and burn.
Covid-19 has fast-forwarded the maturation of digital health in the delivery of care. More healthtech companies are popping up by the day, but only those who have plans beyond COVID are poised to success. Cutting-edge organizations will help guide healthcare into the modern era.
Christopher Malter is CEO of Global Accelerated Ventures, a leading global innovation aggregator in Fintech and HealthTech.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.