Startup trends: Healthtech continues to boom with Krim Talia
The last two years have changed Healthtech radically. Serial entrepreneur and investor Krim Talia shares his thoughts on what’s happening in the industry today, and why.
Accelerated digitalization in healthcare
The pandemic has accelerated the digitalization of the healthcare industry to new heights. Everything changed and people started to prioritize their health more than ever before. Experts say that the COVID-19 pandemic has accelerated the adoption of digital health and virtual care forward by at least three years.
According to the HIMSS Future of Healthcare Report, 80% of healthcare providers plan to increase investment in technology and digital solutions over the next five years. (Forbes) Areas like telemedicine, personalized medicine, genomics and wearables, AI integration, and mental health are all expected to rise.
Over the last couple of years, the healthcare sector has faced major challenges, and true to form, entrepreneurs have been quick to find new solutions. Investors are also digging deep to fund their endeavors. In 2021 WHO released its first global report ever on AI in health.
The value of Healthech over the years
The 2021 global digital health market size was $268 billion and is expected to be $334 billion in 2022, rising up to $657 billion in 2025 (Statista). In 2021 alone, $44 billion was raised globally in health innovation – twice as much as in 2020 – and the acquisition of health and health tech companies rose 50%. (We Forum)
In 2020 alone, Healthtech companies raised a record $14 billion in funding – marking the first time in history that Healthtech investments have outweighed those in traditional healthcare sectors, like pharmaceuticals. In total, Swedish Healthtech startups raised a combined €396m during 2020 according to Dealroom – a record number. And according to Sifted, the combined value of European Healthtechs has grown over 6x from 2016 to 2021 – from $8bn to $41bn.
The pandemic also accelerated shifts in consumer behaviors and expectations, with people today being much more open to digital care and telehealth. But what else is driving these trends, and what does the future of healthcare look like? We sat down with Sting Coach, serial entrepreneur, and investor Krim Talia to get his thoughts.
The big picture: efficiency is key to unlocking real value
Krim believes the healthcare sector faces a shared challenge on a macro level.
“There’s one overarching thing setting the stage for the whole healthcare industry: a super-fast increase in healthcare costs, while taxable incomes are generally flatlining. Because of this, the whole sector cannot expect to see huge inflows of new resources into the healthcare space,” explains Krim.
Today, Europe spends on average around 8% of its GDP on healthcare, the US spends roughly 18%, and here in Sweden, around 9% of GDP is spent on healthcare.
“If you look at where we spend that money, you can cut the loaf in different ways. For example, we’re spending around 5% on Medtech products, around 15% on pharmaceutical products, and the bulk of the money is spent on healthcare services. So, almost 80% of total spending in the healthcare sector is on healthcare itself. This means the approach that has the largest potential to address increasing healthcare costs is to develop innovative solutions that increase efficiency on the ground, for example, in hospitals, nursing homes, and primary care.”
The dismal figures for prevention
If you cut ‘the loaf’ in another direction, Krim explains, you’ll see we’re only spending 1-2% on preventative healthcare.
“Spending on preventative methods is almost non-existent, which is pretty shocking. Our system is extremely reactive, and the bulk of the money – I’m talking like 90% – is spent on people that are already sick, most of which have chronic diseases. And this is a very interesting group of people. These patients have been living with their disease, or diseases, for a long time, and they’re highly motivated to find ways to improve their situation and explore new alternatives. This is a group of people you can really work with to make big changes. I think it’s our duty as a society to help prevent other people from ending up in a similar situation where we can,” says Krim.
The importance of the four Ps
When Krim invests in Healthtech companies, he’s looking for companies that are aligned with four things that he believes are the foundations for the future of healthcare:
“I think the move towards predictive health is the most important trend right now, for example, using AI and health data to improve diagnostic tests so people can predict and monitor their health status.
Then we also see a large interest in prevention, simply because it makes sense. However, the financial models for prevention aren’t fully developed yet. That’s why you see things like health impact bonds emerging, which has been pioneered by RISE Social and Health Impact center and Sting alumni company Health Integrator.
When it comes to participatory, we’re looking for solutions that empower patients to participate in their own treatment and take more responsibility for their health – which is the right way to go. We know the amount of new resources we can put into the system is limited, so we need to involve and empower the patients with the right tool that can free the last hidden resource in the system – the patient themself.
I’m seeing a lot of Healthtech startups emerging that are trying to do this. Take current Sting company Andningmed, for example, which provides a medical device that empowers respiratory patients to improve their inhalation technique and increase compliance with their treatment regimen. Another very strong trend is a number of new companies aiming at the epic opportunity offered by catering to underserved needs within women’s health. New Sting startups like Momentus and Olivia offer personalized health services that empower women in their fourth trimester or women in menopause,” says Krim.
There are also big trends emerging around personalized medicine. For example, we have seen a surge in the Healthtech diagnostics market. The pandemic did, however, reveal that there are huge challenges to be addressed when it comes to robust digital lab infrastructures and solutions that can support home testing with high integrity, trust, and quality.
“These challenges are being addressed by companies such as Findout Diagnostics and Infrion (a current Sting company). We also see companies like current sting company 2Heal that use these new diagnostic opportunities in order to analyze the root causes behind health problems and deliver highly personalized health services,” shares Krim.
But he also believes there’s still a lot of uncharted territory in this space – which presents a huge opportunity for Healthtech startups and entrepreneurs eyeing up the healthcare sector.
“Considering these four Ps is also a way for young startups to structure their thinking about how they contribute to SDG 3 – good health and well-being,” he adds.