What Are Top Healthcare VCs Investing In?

Feb 18, 2020

The myriad problems that exist in healthcare have prompted new health startups to carve out increasingly smaller and more specialized niches. With all of these options for health innovation, what are the top healthcare venture capitalists really looking to invest in?

According to Silicon Valley Bank’s 2020 Annual Healthcare Investments Report, US healthcare fundraising in 2019 increased 10 percent from the previous year, reaching over $10.7B and setting a new record for healthcare investments. Substantial M&A and IPO performance provided significant returns for limited partners, thus driving the uptick in fundraising. The health innovation initiative shows no sign of slowing down.

Here are some of the areas that we believe healthcare VCs will be heavily investing in this year:

1) Digital mental health solutions

In 2019, the market for digital mental health grew exponentially. A rising number of innovators are venturing into the mental health space, vowing to offer patients more choice, greater flexibility and, most importantly, faster access to high-quality care.

Using digital technology to deliver mental healthcare serves as a viable adjunct to mainstream services in lessening the mental health gap for those who don’t have the resources or time to receive in-person mental health care.

2018 Jumpstart portfolio company, Level Therapy, offers a new behavioral health treatment model that simplifies appointment scheduling with an internal team chat feature, includes a HIPAA-compliant EHR model and offers a user-friendly patient data dashboard. Treatment options range from self-help tools to advanced therapy sessions with licensed clinicians direct from your phone.

More companies that utilize digital software to provide care that’s personalized, seamless and effective include Kip and LiteSprite and many others.

2) Patient empowerment

Knowledge is a superpower! The advancement of digital technology has enabled patients to receive the knowledge or data they need with the touch of a finger.

Patient-focused, easy to understand health services are becoming more popular and prevalent as people have started to understand the power and freedom of technology. Patient empowerment helps people gain control over their own lives and increases their capacity to act on issues that they define as important. In 2017, 1.7 billion people downloaded health-related apps further indicating the high demand for people to have personal control over their health data.

3) Healthcare delivery solutions

A health care delivery system is an organization of people, institutions and resources to deliver health care services to meet the health needs of a target population (Am J Public Health). Healthcare delivery systems were created to foster optimal health outcomes by providing cost-effective, patient-centered, quality care with a service emphasis. People-centered and integrated health services are critical for reaching universal health coverage.

ScriptDrop is a great example of a healthcare delivery solution system, offering a team of healthcare experts that provide seamless prescription delivery by connecting pharmacies to a network of professional couriers. The goal is to drive down the cost of healthcare while improving patient outcomes and make it easier for patients to receive care. Isn’t that what we all want?

4) Big data to personalize the healthcare experience

Big data in healthcare refers to the analysis and leveraging of patient, consumer, clinical and physical data that is so vast and complex that it must be processed by machine-learning algorithms and data scientists. Hospitals, clinics and surgery centers routinely collect raw data needed to understand and improve patient experiences.  What they do not have are the tools to interpret and extract meaningful insight that can be translated into improvement priorities.

Companies like Cliexa provide patients and physicians with a platform to track disease activity remotely, and leverage proprietary technology that makes intelligent correlations between medication dosage, frequency and heightened or reduced symptoms. The system allows patients to connect to and pull data from health-specific wearables, as well as specified claims data to correlate and communicate events and daily activities to their physician. This data assists providers by responding more efficiently to changes in baseline metrics, so their patients will have a more targeted and timely treatment, potentially resulting in fewer complications.

Another example of a healthcare company that’s made an impact in the big data healthcare space is PatientsVoices—a platform that converts patient comments and stories into reportable, trackable and actionable data analytics. The platform uses sophisticated algorithms to translate feedback patterns into concrete priorities and metrics that hospitals can use to quickly improve patient experience.

5) Food as medicine

The idea that food can greatly influence mental and physical health has been around for decades. Many healthy foods and liquids offer strong protective and medicinal benefits and the opportunities for using food as medicine has grown exponentially in recent years as new technology allows for more specialized studies to be conducted. Holistic nutritionists, mind-body practitioners, patient advocates, chefs and even some traditional doctors have started pushing patients to consider the ‘food as medicine’ approach more seriously, making it an increasingly popular investment opportunity for healthcare VCs.

If you want to learn more about all of the opportunities in food as medicine, read the whitepaper here.

6) Personalized (precision) medicine

According to the Precision Medicine Initiative, precision medicine is “an emerging approach for disease treatment and prevention that takes into account individual variability in genes, environment, and lifestyle for each person.”

Since the beginning of recorded history, healthcare practitioners have tried make their actions more effective for their patients by experimenting with different treatments, observing and sharing their results and improving the efforts of previous generations.

Becoming more accurate, precise, proactive and impactful for each individual has always been the goal of all clinicians—no matter how basic their tools.

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