Healthcare in 2023 is experiencing a pivotal moment for the sector. Despite the scientific, technological, and systemic progress made during the pandemic, the sector is now confronted with mounting demand and a worldwide budget squeeze. The pandemic compelled healthcare providers to implement innovative care models that upended a field that had long resisted change. The current crisis has created an opportune time for a much-needed transformation in global healthcare, and has also served as a model for emerging markets to construct agile, digitally-driven, and asset-light healthcare systems. The current challenge for industry leaders is to sustain this momentum amid escalating costs, outdated infrastructure, and politically-charged environments.⁵
HealthTech companies are placing significant emphasis on the chronic diseases sector, which is a leading driver of healthcare expenses and a major cause of morbidity and mortality worldwide. Currently, there are c.480 digital health ventures, which provide solutions for chronic diseases. The total venture volume for the chronic diseases sector has grown at a CAGR of 5.3% over the last five years and a total $10.1b has been raised across 879 funding deals.²
Global chronic diseases deal making is gaining momentum, as deal volume has ticked up to five deals during the period, with a total deal value of $15.9m in the January-February period of 2023, compared to the same period in the previous year. Fundraising decreased slightly, with the $478.9m of capital raised in January-February of 2023 being a c.$25.6m (5.1%) decrease when compared to the same period a year ago. Fundraising deal volume hit its peak during the pandemic and has since decreased to 16 deals, although this volume is still in line with pre-pandemic levels. Fundraising deal size was equally split between small, medium and large deals, with some notable deals including Monogram Health’s recent January 2023 raise of $375.0m, bringing their total funding amount to $555.1m. Monogram Health provides in-home care for patients diagnosed with polychronic ailments, such as chronic kidney disease and end-stage renal disease, utilising evidence-based and whole-person approaches. Key exit transactions included Nemaura Medical’s, an affordable diagnostic and digital tools for Chronic Disease Management, recent Post-IPO Equity transaction of $8.4m. Additionally, Reliant Immune Diagnostics, a patient-driven health platform that provides medical care, testing, diagnosing, and monitoring solutions, was recently acquired by OpenLoop Health for an undisclosed amount.
Through the use of technology and data, HealthTech companies are creating ground-breaking solutions that enhance the treatment and management of chronic diseases. These innovative solutions comprise personalised medicine, remote patient monitoring, digital therapeutics, data analytics, and Artificial Intelligence (AI). Personalised medicine approaches take into account the individual’s genetic makeup and medical history, which leads to more targeted and efficient treatment. Remote patient monitoring technology empowers patients to manage their health from their homes, which in turn enables more proactive and effective chronic disease management. Digital therapeutics employ technology like mobile apps and wearables to treat chronic diseases, thereby reducing the need for conventional medications and treatments. HealthTech companies also leverage data analytics and AI to scrutinise large volumes of patient data, in order to uncover patterns and trends, and develop more effective treatments. Collectively, the chronic diseases sector in HealthTech is focused on improving patient outcomes and minimising healthcare expenditures by devising innovative solutions that better manage and treat chronic diseases. Overall, the rising prevalence of chronic diseases, substantial market potential, advancements in technology, potential for cost savings, and backing from regulatory bodies establish chronic disease companies as a compelling investment option for investors.
Notes:
¹Exits: An exit occurs when an investor sells part or all of their ownership ²HealthTech Alpha ³Crunchbase ⁴Small deals are considered to be <$1m; Medium deals are considered to be ≥ $1m<$5m; Large deals are considered to be ≥$5m ⁵HolonIQ
This analysis was originally published in the X Report — an IMPACTX2050 newsletter providing thematic coverage of 3 tech-led industries experiencing unprecedented inflows of impact investments: Education, Health and Food.
