Investor interest in healthcare technology is on the rise amid a pandemic that has put a spotlight on telemedicine, patient monitoring, and more. Global VC funding to digital health companies reached a record $10.3 billion through the first nine months of this year, up 43% year-over-year, according to Mercom Capital Group.
At the GeekWire Summit on Tuesday, we brought together three investors who are spending time at the crossroads of technology and healthcare. Read on for takeaways from the conversation, which included Threshold co-founder Emily Melton, Biomatics Capital co-founder Julie Sunderland, and Canaan Partners general partner Nina Kjellson. Dr. Robert Overell, president of Foundation BioVenture, moderated the discussion.
No slowdown: Nearly all industries braced for the worst when COVID-19 began spreading. But the investors agreed that activity within the healthcare tech market is now accelerating. Sunderland called out the progress being made with COVID-19 therapeutics and vaccines, as well as advances with telemedicine and remote care.
“It’s been a good signal of the thesis we all have, which is that we live at an extraordinary time in terms of innovation in biopharma and innovation in the application of technology to healthcare,” Sunderland said.
Melton added: “We are not seeing a slowdown now. If anything, it’s actually faster than it’s ever been and one of the most competitive markets I’ve ever been involved in.”
Holy grail: As remote care becomes more common, collecting reliable data from patients outside the clinic or hospital and making it seamless will be paramount. Kjellson called it the “holy grail” of remote care.
“Whether it’s for clinical use to practice better medicine, or for clinical trials to get better data, that is a trend accelerated by COVID and is here to stay and will drive value going forward,” she said. “From an investment basis, if we can improve that reliably, we should be looking for those opportunities and investing in those opportunities. It will make better medicines, it will drive better clinical trials, it’s good for the healthcare system.”
Melton said that’s particularly true if the right value-based incentive business models are also put in place so people are encouraged to participate in the data collection process.
Sunderland said she’s excited about using data to drive behavior change, but the lack of payment mechanisms is a roadblock to capturing value and building new businesses.
“When you run into that wall of trying to sell tools into the payer system, and you realize how hard it is and how long those enterprise cycles are and how hard it is to get to scale even if you were creating value from patients, you get discouraged pretty quickly,” she said.
Not just computers for healthcare: The relationship between tech and healthcare is rapidly evolving as digital tools and services are applied across various sectors.
Melton called out Livongo, the digital disease management company that announced its $18.5 billion acquisition by Teladoc Health in August. The Livongo “solution” includes both hardware such as monitoring devices, and software that provides data insights and enables patient communication.
“We get excited about those intersections,” said Melton, whose firm invested in Livongo. “It’s not just thinking about only investing in software companies or services businesses or medical devices companies, but looking at where to bring those pieces together to create unique experiences that drive more value.”
Kjellson added that many biotech companies are now built on the power of informatics, whether it’s processing data or doing faster DNA sequencing. She also brought up Vineti, which sells software that helps manage the supply chain and manufacturing process for biotech firms developing personalized treatments. The company counts both Threshold and Canaan Partners as investors.
“Vineti is trying to be the enterprise solution to modernize how you connect all of these nodes from the couriers to clinicians to the manufacturers so you have a really safe, seamless, transparent process for how precision medicine gets delivered to patients,” Kjellson said. “That’s a very different way of thinking about health IT than ‘computers for healthcare.'”
[The full interview with the healthtech investors, and other GeekWire Summit sessions, are available on-demand exclusively to attendees of the virtual event. Learn more and register here.]
