Examining over 12,000 digital health ventures

Galen Growth, the leading digital health, data-driven market intelligence company, and FINN Partners, an independent global integrated marketing services agency, announced that the first “Global State of Digital Health Report” will be released today at the HLTH Conference in Las Vegas during a special session hosted by UC Davis Health. This first report analyzes more than 200M data points from more than 12,000 digital health ventures worldwide.

Experts from the Galen Growth data and research team have been working side-by-side with the FINN Global Digital Health Group to chart the complex and often fragmented digital health landscape, emerging market trends, areas of growth, and innovation. This novel report goes beyond market ups and downs. It defines what therapeutic sectors are high priority, what digital health geographic hubs benefit most from the capital infusion, and at what stages of development equity funds prefer to engage and invest.

Report Provides Category Leaders with a Roadmap

“This first-of-its-kind ‘Global State of Digital Health Report’ does more than examine monies invested in the broad digital health category,” said Julien de Salaberry, CEO and co-founder of Galen Growth. “It offers the corporate, accelerator, and private equity decision-maker a roadmap for how multiple data points translate into market shifts and how to pinpoint trends that provide predictive insight and best practices in investment strategies, across regions, digital health categories, therapeutic areas, and technologies.”

While 2022 digital health venture capital has not matched the skyrocketing value of 2021, the closer look provided in the report reveals that capital infusion in 2022 exceeds 2021 values for the Early Stage and Series A funding rounds. It increasingly lagged in 2021 values across later funding stages.

Highlights:

• Early-stage venture funding remains strong and promises a healthy innovation pipeline, while the IPO market has stagnated, with 6 IPOs and 4 SPACs globally. M&A activity has maintained strength, with a dip of only 7 per cent YOY.
• With only 27 per cent of ventures having raised venture capital in the last 18 months, the remainder of the ecosystem could be facing a bumpy ride, pushing their C-Suite and investors to cut costs, focus on profitability before growth or rethink business models.
• A global analysis of 12,000+ digital health ventures reveals that just 17 per cent have significant clinical strength. Though some therapeutic areas saw funding shrink by more than 30 per cent, oncology maintained the position of the most invested therapeutic areas in Q1 – Q3 2022, and mental health held the second position.
• Among the top 5 most invested therapeutic areas, gastroenterology was the only one that saw an increase in funding (2 per cent) from 2021 to 2022.
• More than 60 per cent of the total venture funding value comes from North America. But on a regional level, the Middle East (Israel and the United Arab Emirates) set record highs of venture funding in Q2 2022. Europe maintains momentum throughout 2022 and has not experienced the quarter-on-quarter decrease in venture funding seen in North America. Regions with increased investment correspond to established regulatory, public health and payer systems that prioritize digital health use.

Not Simple “News Grabbers”

“In the ‘Global State of Digital Health Report, data are shared not as simple ‘news grabbers’ but as a whole dynamic picture of an evolving digital innovation sector that continues to offer transformative power to find effective detours around health ecosystem fragmentation and use the information to improve care and reduce overall system costs,” said Ritesh Patel, Senior Partner, and Global Digital Health Lead at FINN Partners. “This first report lays the groundwork for future releases recapping the year-to-date in digital health and focus on global investment insights, categories, and therapeutics to accelerate long-needed change.”

“Suddenly cut off from ‘in-the-room’ contact, digital was the connective tissue between physicians with their ailing patients and pharma brands with consumers and payers,” notes Gil Bashe, Chair Global Health and Purpose, FINN Partners. “But enthusiasm – the rush to enter the digital health category – cannot triumph over strategy and long-term business planning. This report will help C-Suite decision-makers determine where the health innovation is headed and why. Any road will do when you don’t know where you want to go. But the system needs to know where it’s headed when it comes to sustaining people’s health.”

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