- Several recent reports simultaneously indicate the fundraising landscape is extremely strong for new digital health ventures, Forbes reports.
- The reports by Startup Health, Rock Health, and Silicon Valley Bank highlighted particular interest in consumer digital health, with SVB noting that 55% of digital investments since 2011 have been toward companies catering directly to consumers.
- The reason investors are so interested in the consumer experience, according to Rock Health, is the growth in high deductible health plans, which have been increasingly shifting costs to consumers and making consumerization a ripe area for disruption.
It's clear 2016 has been a strong year, and possibly the biggest yet, for digital funding. A total of $6.4 billion has been invested in digital health ventures during the first three quarters of the year, according to StartUp Health.
StartUp Health's report also pointed to investor focus on the consumer experience subsector, noting it received the largest chunk of this year's investments, followed by the wellness subsector, and the personalized health subsector.
However, one of the questions to consider in this area, suggested Forbes' John Graham, is whether businesses focusing on consumerization might be trying too hard to "disrupt that which may not (yet) be disruptable."
SVB's report shows the most valuable opportunities in consumer digital health are currently in connecting the patient experience to real-world data or clinical-grade data. Those focusing on areas such as fitness or wellness, apart from the healthcare system, are seeing their valuations decline, SVB found. Some of these businesses are finding ways to develop a more clinical angle, SVB added, highlighting how Fitbit has partnered with the Dana Farber Cancer Center to look at any impact of weight loss on breast cancer recurrence.
athenahealth CEO and President Jonathan Bush also recently addressed the issue of direct-to-consumer digital health tech, telling Healthcare Dive he primarily sees a future for technology that can expect mass adoption or to "slipstream" behind something mainstream that will, like the Apple Watch, as opposed to something clinical.
"It’s ironic because these [healthy well] are the last people in the world that need healthcare," Bush said. "But they’re going to drag through the five who have chronic health issues who are going to be using the same technology to try and dig themselves out of the grave."