Min-Sung Sean Kim

Amazon started a healthcare focused joint venture with Berkshire Hathaway and JPMorgan Chase; bought PillPack for almost a billion dollars and launched a new service that extracts medical data from patient records. While Verily’s Study Watch is specifically designed to enhance clinical trials with more data, Apple launched its own entirely virtual study with its consumer watch and released its heart study last month. [≈6 min] RockHealth suggest that the IPO drought in digital health is finally over with Livongo, Peloton, Change Healthcare, and Health Catalyst planning to go public this year. Only thing we know is what to expect: Increasing property prices in SF, increasing number of McLarens and Tesla in SF’s streets, talent cashing out and starting to fund the next generation of unicorns.

There is no shortage of stories highlighting the lack of transparency in healthcare. Example #337: scam with “top doctor” awards

Chinese Tech giants and government agencies are investing heavily in infrastructure to make datasets publicly available to other researchers and AI companies. In digital health, these AI companies need medical experts to annotate images to teach algorithms how to identify anomalies. It was interesting to read this interview with Chinese Unicorn Yitu Technology in South China Morning Post. Yitu reports that it has a team of 400 doctors working part time just to label medical data, and adds that higher salary ranges in the US may make this an expensive option for startups here.

Having seen over 3,000 companies in this field, I concluded that being a purpose-only startup, or saying how many lives will be saved through the product, is not enough to reach the next level of financial professionality the ecosystem needs, to be taken seriously by growth investors. Watching the ecosystem develop in Europe I noted that the first companies that went bankrupt were the ones that mainly saw building up a healthcare company as solving a technological challenge, not a business challenge where you need to align yourself with the existing interests within the healthcare system. Looking at companies that have successfully surpassed the Series A stage, it is notable that most of them are about digital access to doctors (KRY, Doctolib, DocPlanner, Babylon Health, Push Doctor, Infermedica…) consumerism (mimi, MEDIGO, Caspar, Natural Cycles, Clue…), health data (Symptoma, AdaHealth, YourMD…) and monitoring/prevention (dacadoo, Kaia Health…). Despite the professional approach of these growth companies, one of the major trends I have seen with digital health founders is that they focus solely on the patient benefits and neglect the business figures behind their purpose.