At the beginning of 2019, we released our 2019 predictions blog based on everything we had read and heard from our members, advisors, friends at start-ups, and investors, coupled with data from the HealthXL platform.
In this weeks blog, we are going to do a roundup of some notable investments that have occurred so far in 2019, assessing the types of companies that are catching the interest of investors, and explore if these correlate to our previous predictions, if there are any new trends to add to your radar, and if trends are deceptive in what they convey about importance.
Here's a quick overview of our predictions for 2019:
2019 Investments - Where is the money going?
Looking first to our prediction around the application of artificial intelligence (AI) in healthcare, so far in 2019 we have seen a particular interest from investors in companies that leverage AI and machine learning to improve clinical performance.
- In April 2019, PathAI raised $60M to further their computer vision-based pathology detection service. PathAI is engineering and applying proprietary deep learning technology to massive aggregated sets of pathology data to help physicians and scientists more effectively understand, diagnose and treat disease. The most promising element of this approach is combining the expertise of the human pathologists with the efficiency of the AI system to achieve robust results.
- In April 2019, Aidoc raised $27M in a Series B funding round. Aidoc is a deep Learning startup in the radiology space, augmenting the radiologist workflow by detecting and highlighting findings in medical images. They plan to use the funding to expand from the 100 hospitals currently using their software to 500+ hospitals.
- In March 2019, Health Catalyst raised $100M and attained unicorn status. The money will be used to further develop their suite of analytics apps which aims to drive clinical and operational performance improvements, and to expand the Health Catalyst workforce. Their core offering, Data Operating System, comprises a sophisticated AI-driven data warehousing architecture targeted at population health and value-based care.
On the back of the digital therapeutics rise to fame in 2018, it is no surprise to see that investors are still interested in this space.
- In May 2019, Noom raised $58M. Noom, like many other digital therapeutics on the market, have developed a behavior change platform to treat chronic and pre-chronic conditions. It is expected that the money will be used to help to expand the company.
- In February 2019, Calm raised $88M in Series B funding. Calm has built a meditation app focused on helping users tackle anxiety, stress and insomnia. Their announcement earlier this year that they are the first mental health solution to reach unicorn status, as well as this latest funding round, highlights the massive potential for digital therapeutics in the mental health space.
- In January 2019, Pear Therapeutics raised $64M in a Series C funding round. This follows an impressive 2018 for Pear Therapeutics, in which they received FDA approval and formed a commercial partnership with Sandoz. The $64M will be used to help with the commercialisation of reSET, and to further develop their clinical pipeline and explore new therapeutic areas including epilepsy, PTSD, Pain and MS.
As we predicted, interest in digital therapeutics is now turning to the question of how to get the technology into the hands of patients and physicians. Ultimately, where the prescription environment will go is towards more standardised recommendations through prescription platforms and evolving reimbursement codes.
- Digital Health prescription platform Xealth raised $11M in a Series A funding round in March 2019. Xealth’s digital health prescription platform allows physicians to prescribe a wide variety of apps or other digital health tools to their patients, as well as monitor patients’ engagement or progress. Notable investors in this round include Philips, ResMed and UPMC, with Froedtert Health leading the funding round.
Health insurance is joining the modern healthcare movement, with incumbents and newcomers leveraging technology to augment their offerings. As we predicted, health insurance is getting more digital, and investors are noticing the opportunity these solutions present to help personalise health plans, allow smart triage of queries, augment consumer engagement and retention, and improve consistency of claims and transparency.
- Clover Health is an example of a newcomer to the space that has been making waves over the last few years. In Jan 2019, they raised a staggering $500M, bringing their total funding to $925M. They are not the only modern insurer to raise serious capital, with competitors Oscar Health, Bright Health and Devoted Health all having had funding rounds of $200M+ in the last few years.
- HealthJoy offers a wide range of services for ASOs and TPAs, including claims management, a virtual assistant for triage and appointment booking, medical bill review and health cost estimator. In March 2019, they raised $12.5 million in Series B funding, which the company said will be used to expand their staff and services.
As predicted, the competition for primary care is continuing to grow, and there is a big push towards making care more affordable and accessible. There have been some big investments in this space in 2019, and we suspect the trend will continue.
- In March 2019, France based DoctoLib raised $150M and achieved unicorn status. DoctoLib plans to use the money to continue development of its telehealth solution and to continue expanding internationally.
- Trusted Doctor, a venture backed by Chinese tech giant Tencent Holdings, raised $250M in April 2019. Trusted doctor is a telehealth solution that connects 440,000 certified doctors with more than 10 million patients online.
While telemedicine is one of the biggest opportunities for improving access to primary care, we are also seeing new models of care becoming popular and raising capital, with a number of primary care disruptors emerging who engage with employers, insurers, and health systems to provide their own practices enabled by a suite of technology solutions.
- In March 2019, CityBlock Health raised $65M. Their innovative care model combines primary care services, behavioral care, chronic disease management, substance abuse treatment and services that address social determinants of health. They work with those who access Medicaid, are dually eligible for Medicaid and Medicare, and others living in underserved neighborhoods.
Clinical trial optimisation is a key priority for pharmaceutical companies. Investors have taken note and funded a wide range of solutions in recent years, from technology to enhance recruitment and retention for clinical trials, to AI and big data to find diverse sets of patients most suited for clinical trials, and remote patient monitoring and medication adherence tools to drive retention.
- In February 2019, Irish based Teckro raised $25M for their solution that aims to make the conduct of clinical trials more efficient and collaborative.
- In March 2019, TriNetX raised $40M in a Series D funding round. The money will be used to continue expansion into Europe, Asia, and South America and for further development of their digital clinical trials technology.
Other notable activity occurring so far this year include a number of investments in the direct to consumer space, with investors taking note of the continued success of companies like 23andMe, who are benefiting from the growing interest and engagement from consumers around their own health.
- Everlywell raised $50M for their home-based lab test in April 2019. While our 2019 predictions blog predicted that Amazon would make big waves in the consumer diagnostic space this year, it is clear that they will have some strong competitors who are being backed by investors and garnering significant interest from consumers.
- While consumer diagnostics is certainly an area to keep an eye on this year, we are seeing capital going into another area of the direct to consumer market - female health. In April, Elvie raised $42M for its female health related products. This follows a number of other investments in the femtech space, including a $7.5M investments in Cora, and $9M investment in NextGen Jane.
Where capital is being deployed is generally a good indicator of a promising area within the market, however we also need to look at other factors like partnerships, commercial traction, and whether or not these investments are being matched by sufficient evidence of the solutions ability to deliver improved healthcare outcomes, to truly understand what areas of digital health will have the biggest impact. Companies that wisely use their investment to build a solid evidence base to support their claims, and not just on growth and marketing of promises, will emerge as winners in gaining traction, and getting into tangible partnerships with incumbents, among other things.
In our Q2 Report, Digital Health Evidence Review 2019, we are aiming to identify, categorize, and summarise all existing, relevant studies in digital health. Through this report, we want to establish a clear understanding of the existing body of clinical evidence for digital health, its maturity, current gaps and needs.
Do you have specific questions on clinical validation for DH? Reach out to us - we'd love to get your ideas and answer your pain points.