Where are the Hotspots for digital health tech companies in Europe?
Major European investors are showing more interest in backing small healthcare technology innovation companies in Europe; and large corporations are getting ready for an open innovation storm. Major technology companies are moving into healthcare, giving investors new insight into the commercial potential of the digital health sector in Europe.
Here is a map of the most hyped digital health startups in Europe.
It seems that the UK with London, Germany (Berlin and Munich), Holland and Paris are leading the field of providing digital health startups. It’s likely that venture capital investors will scout startups that are in close proximity and supported by a broader health and technology ecosystem, making UK, Holland, Spain and Germany particularly populated with digital health startups and interesting for investors.
(NB: This is a handpicked selection, not a complete list – the landscape is also changing constantly)
At the Digital Health Forum 2014 (DHF14) at The Royal Society of Medicine held on the 24th of June, London proved that it had more to offer to the digital health startup ecosystem than just heated discussions about disruptive change and the challenges of delivering healthcare services to a growing population.
DHF connected investors (Inventages, FJEsprit, SEP, Advent Ventures, Index Ventures, among others), large corporations like Merck and J&J; and also a raft of digital health innovation startups, many of whom also had the opportunity to make presentations.
Investors were also wowed by a best-digital-health-startup competition between a “Hot 5” of Health 2.0 businesses. TraveDoc, an online appointment scheduling service for doctors worldwide, appealing to travelers and global citizens was awarded ‘Most innovative newcomer’. Runner up was Handle My Health’s MIAMI, the next-generation patient intelligence engine based on smart devices and the web.
More established companies presented their successes in finding scalable business models and overcoming the challenge of sourcing finance, too. Zesty UK explained its mission to bring choice to the healthcare market, powering what CEO James Balmain calls “healthcare on demand”. The company offers an easy-access online booking services that helps patients to find and book healthcare appointments in just a few seconds. His business model in this space is convincing: US counterpart ZocDoc is already a commercial success and boasts a $1.6 Billion valuation.
But Balmain says competition will heat up, both in the US and here in Europe, so his overarching mission extends well beyond bookings. “We want to become an integral part of the health system - public and private - making it as easy as possible to get the right people into clinics,” he says. Co-founder, Lloyd Price adds,“Our system will be able to integrate with other platforms and systems, for example features for online booking in Apple’s IOS 8 and the other emerging platforms as they develop”.
Wireframe Apple HealthKit / iOS8 online booking integration, from Zesty.
"Now is the time to invest and build. The current funding environment presents more scalable opportunities for technology startups and entrepreneurs than ever before", says Eugene Borukhovich, VP Healthcare for European Markets at SoftServe, the technology outsourcing company and sponsors of DHF14. He also says the ecosystem in Europe is well designed for larger and smaller companies to work together, and highlights what he likes to call the “internet of wearable things” as a rich opportunity for innovators to drive healthcare in new directions. “90% of the world's data has been generated in just the last two years and we are only at the beginning of this data exploration”, he says. “The potential is there to drive and improve healthcare of hundreds of millions of healthcare customers”.
Open Innovation Opportunities: Pharma and Tech corporations finally wake up
At DHF14, Merck’s Executive Director, Strategy and Business Development for Healthcare Services and Solutions, Thomas Tsang, shared a panel with representatives from Pharma giants, J&J, GSK and Novartis. Tsang explained that he was confident that working with health technology startups has great potential and that this collaboration is a strategy in which Merck sees great opportunity. Merck has recently focused on health hackathons (coding competitions in health IT), and the business has ambitions to further explore open innovation in partnership with health technology startups.
DHF14 also gave Tsang the chance to explore the European digital health landscape first hand, after taking up his role only a year ago.
The Pharmaceutical sector increasingly spells open innovation in capital letters. UK and US based Pharma 2.0 business, TrialReach, presented itself confident to offer a desirable value proposition to the new Pharma world. Pablo Graiver explained that his company’s concept is not much different than a Uber or any other online technology or e-commerce concepts, but for healthcare. If this is right, and Graiver platform can hold its promise to quickly as platforms scaled in other business verticals, Lifescience companies want to get involved sooner than later.
Marco Mohwinckel, Global Head, Integrated Care Solutions at Janssen Healthcare Innovation also had a confident outlook. He says innovative Health 2.0 companies can help his company to accelerate the pace of innovation towards stronger outcomes. The panel in which Mohwinckel participated also highlighted the role which Health 2.0 businesses might play in helping larger pharma businesses to establishing competitive advantage – at a time when competition in the sector is becoming tougher. There have recently been increasing reports on significant M&A activity in the Life Sciences sector – it’s one more reason for J&J, Merck and others to get involved.
Of course, things aren’t only moving fast in the world of pharma. In a wave of new healthcare technology announcements, Apple just trailed its latest plans for a health and fitness app – or perhaps more accurately a health and fitness environment - that will ship with iOS 8. Samsung Electronics has announced plans to capture consumer health information. And then, another headline hit the news. In the race to dominate the fast-growing digital health industry, Google unveiled a service designed to collect all of a users' fitness data in one place: Google Fit. Vishal Gulati, Venture Partner at DFJ Esprit and one of the hosts of DHF14 says this sector excitement is no coincidence and is convinced that larger opportunities will open up.
Health Startups in Europe - Digital Health Climate in the UK stays HOT
The UK, particularly London, is home to many strong digital health startups (as the Google map engine story shows) and Public Health England is now looking to the tech start-up community to improve the nation’s health (report).
The UK government, which is leading the field in Public/Private partnerships (PPPs), has just launched the HealthX competition. The paltry £15k of seed funding is unlikely to be a critical factor in driving applications, but there are more attractive opportunities. HealthX comes with the ability to market to Public Health England’s database of 3.2million UK citizens and on the NHS Choices website (with more than 1 million visitors per day). This sort of exposure might also give the winner new confidence from investors, whose main concern is scalability and growth.