Digital well being funding had a blockbuster 12 months in 2021, propelled largely by the shift to digital care throughout the COVID-19 pandemic.
The primary 9 months alone introduced in a complete of $21.3 billion for digital well being startups throughout 541 funding offers, dwarfing the $14.6 billion report of 2020, in accordance with Rock Well being, a enterprise fund devoted to digital well being.
That momentum is projected to proceed in 2022 as digital well being corporations paved the way in healthcare innovation with using synthetic intelligence, machine studying, knowledge analytics and telehealth.
Listed below are 5 digital well being markets to observe as traders look to pour main money into the healthcare sector:
1. Telehealth 2.0
Following a telehealth growth in 2020 propelled by the COVID-19 pandemic, digital visits have began to stabilize however at elevated ranges in comparison with pre-pandemic demand.
Telehealth use total has leveled off at ranges 38 occasions increased than earlier than the COVID-19 pandemic, starting from 13% to 17% of visits throughout all specialties, in accordance with an evaluation from McKinsey launched in July.
This, in flip, has fueled large funding into digital care corporations. Globally, telehealth corporations raised $4.2 billion within the first half of 2021, in accordance with Mercom Capital Group, a worldwide communications and analysis agency.
Business consultants say the telehealth trade is changing into extra mature and is shifting away from simply pressing care visits to give attention to extra specialised care, or what some name “telehealth 2.0”
The large telehealth gamers to begin to construct out specialised digital clinics for high-cost circumstances like kidney illness, MSK ache or migraines to maintain up with startups flooding the market, Jeff Becker, principal healthcare analyst at CB Insights, advised Fierce Healthcare again in October.
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Invoice Taranto, founding companion and president of Merck World Well being Innovation Fund, Merck’s $500 million enterprise fund investing in digital well being,
“In 2022, entrepreneurs and traders will increase telemedicine into extra continual care areas like cardiology. At present, somebody within the U.S. suffers a coronary heart assault each 40 seconds and coronary heart illness prices the U.S. about $219 billion a 12 months,” he mentioned.
Telehealth provides a extra handy, cost-effective option to diagnose and deal with heart problems.
“Total, count on telehealth gamers to construct out their choices throughout the continual care panorama in a significant method in 2022,” Taranto mentioned.
2. Rising demand for wearable tech to observe well being
Customers are shopping for extra linked monitoring gadgets, spurred by the COVID-19 pandemic, and it is a pattern that is anticipated to ramp up in 2022.
Deloitte predicts sturdy demand for wearable wellness know-how in 2022 with 320 million shopper well being and wearable wellness gadgets anticipated to ship worldwide in 2022. By 2024, that determine will attain 440 million models, the corporate predicts. This development is probably going being pushed by new choices hitting the market and extra healthcare suppliers changing into comfy utilizing them.
Individuals are more and more utilizing sensible watches to observe their well being, not simply their operating tempo, as new {hardware}, software program and apps have turned them into customized well being clinics, Deloitte analysts wrote.
Coronary heart price displays at the moment are normal on most smartwatches, and a few have FDA approval for detecting abnormalities similar to atrial fibrillation, a significant reason for stroke.
Main healthcare gamers are ramping up their investments within the wearable and linked system markets. Finest Purchase spent practically $400 million to amass Present Well being, a distant affected person monitoring and linked system firm. Google shelled out $2.1 billion for health monitoring large Fitbit. And tech firm Whoop, which makes wearable health monitoring know-how, raised $400 million thus far, with a $3.6 billion valuation.
Smartwatch innovation is accelerating quickly, due to advances in sensors, semiconductors and synthetic intelligence. With extra subtle well being monitoring options, shopper wearables can now act as a screening device to flag a possible medical situation however should not subtle sufficient for use as medical-grade gadgets, in accordance with Mark Day, govt vp of analysis and growth at well being AI firm iRhythm.
“What [consumer wearables] can do is elevate consciousness of well being and wellness, which permits sufferers to be simply recognized after which come into the normal healthcare system for analysis and therapy,” Day mentioned. iRhythm is a digital healthcare firm centered on cardiac care that mixes wearable biosensor gadgets and cloud-based knowledge analytics.
On the flip aspect, conventional medical gadgets will migrate extra in direction of wearables, with shopper consolation in thoughts.
“We’re pursuing an FDA clearance for a wearable kind issue that operates at a medical-grade functionality. I feel shopper gadgets and controlled medical gadgets will transfer nearer to one another and this can be a pattern that can proceed over time. This may assist enhance inhabitants well being as extra sufferers may be engaged in proactive administration and therapy at an earlier level,” he mentioned.
3. Digital psychological well being apps will department out into extra circumstances
The digital psychological well being area was rising quickly even earlier than the COVID-19 pandemic however stress and anxiousness introduced on by the well being disaster have accelerated demand for digital behavioral well being providers, together with cellular psychological well being apps.
The potential marketplace for these apps is appreciable. Almost 800 million folks worldwide, or 11% of the worldwide inhabitants, dwell with a psychological well being situation.
Deloitte World predicts that international spending on cellular psychological well being functions will attain near $500 million in 2022. That’s assuming an annual development price of 20%—a conservative determine, contemplating the 32% development these apps loved, from $203 million to $269 million, from the primary 10 months of 2019 to the identical interval in 2020, the corporate wrote in a latest report.
And it is a market that is attracting large funding {dollars} for startups. Globally, psychological well being startups raised a report excessive of $2 billion in fairness funding in 2020, in accordance with CB Insights.
Psychological well being is the top-funded therapeutic focus thus far in 2021 with $3.1 billion raised, in accordance with a latest report by Rock Well being, a enterprise fund devoted to digital well being.
There’s now a rising crop of digital psychological well being “unicorns,” or privately held startup corporations valued at over $1 billion. These embody Cerebral, Trendy Well being, Lyra Well being and Ginger, now merged with Headspace.
As digital psychological well being corporations compete in an more and more crowded area, corporations are starting to distinguish by specializing in advanced psychological and behavioral well being assist, together with critical psychological sickness and substance use problems, in accordance with Rock Well being researchers.
Count on to see a heightened give attention to scientific proof to display that digital options are protected and clinically efficient to be able to win over regulators and payers just like the Facilities for Medicare and Medicaid Providers (CMS).
“There’s plenty of saturation within the market with corporations providing very related merchandise. Ultimately, these corporations should differentiate themselves not based mostly on claims however based mostly on outcomes,” John Torous, M.D., director of the digital psychiatry division at Beth Israel Deaconess Medical Heart in Boston, advised Fierce Healthcare.
“As COVID-19 accelerates the demand for digital psychological well being providers, corporations might want to separate themselves based mostly on who has high-quality proof that it really works,” he mentioned.
4. Digital girls’s well being will increase to extra complete care
Digital well being startups centered on girls’s well being noticed a sudden meteoric rise in 2021, surpassing $1 billion for the primary time because the sector pulled in $1.3 billion in funding throughout 26 offers within the first three quarters.
The ladies’s well being market is projected to hit $60 billion by 2027, in accordance with Emergen Analysis.
The brand new wave of girls’s digital well being funding is pushing past historic norms of being pregnant and fertility assist to extra complete choices, from major care to continual illness administration and menopause, in accordance with Rock Well being.
“We’re seeing an evolution within the final two years, the place earlier than that ladies’s well being was primarily centered on menstrual well being and fertility, and now we’re seeing an growth past these classes. The successes from these companies confirmed that it’s an enormous market, that’s it not a distinct segment,” mentioned Marina Pavlovic Rivas, founder and CEO of Eli Well being throughout a latest webinar in regards to the girls’s well being market.
“Girls are solely fertile for 30 years, however virtually all of the investments are in that maternal area. There’s a lot that occurs earlier than and after fertility,” Kaitlin Christine, founder and CEO of Gabbi, mentioned throughout the identical webinar. ” It’s more and more vital to consider girls’s well being as holistic. I don’t suppose that shift has occurred fairly but, however we’re on the precipice the place I feel we will see extra funding and give attention to these different issues that aren’t maternal centered.”
Business consultants count on funding in girls’s well being corporations to proceed in 2022 as these startups focus extra on underserved populations and increase into extra well being circumstances.
However there may be nonetheless a necessity for extra buy-in from enterprise capital companies, they mentioned.
“Girls’s well being is considered as this class the place traders test the field and say, ‘We made our girls’s wager.’ That’s stunning to me given how massive the class is and the way substantial a portion of the inhabitants it’s and the way a lot want there may be,” Christine mentioned. ” You’ve massive funding funds which have but to make a girls’s well being funding.”
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5. Digital therapeutics are prepared for prime time
Traders have taken a eager curiosity in digital therapeutics, judging by the sheer amount of money being funneled into the area.
DTx delivers evidence-based therapeutic interventions through software program, like cellular well being and wellness apps, that exchange or complement the prevailing therapy of a illness.
Yr-to-date funding within the DTx trade is up 79% over 2020, in accordance with CB insights. And the worldwide digital therapeutics market is projected to hit $13.1 billion by 2026, up from $3.4 billion in 2021, in accordance with a Markets and Markets report.
About 35 to 40 digital therapeutics have been permitted by the FDA since 2017, although the company doesn’t have a selected definition for the merchandise, Morning Seek the advice of reported.
“Greater than another space, that is the area the place I consider we’ll see essentially the most entrepreneurial and funding exercise within the coming 12 months,” Taranto mentioned.
He forecasts that digital therapeutics will present promise within the coming 12 months are in psychological well being and substance abuse. Pear Therapeutics, for instance, lately obtained breakthrough system designation from the FDA for its digital therapeutic candidate centered on the therapy of alcohol use dysfunction.
In the course of the pandemic, federal regulators loosened some necessities to make digital well being instruments extra accessible.
However the sector continues to face regulatory and payer-side challenges that might sluggish widespread adoption.
