Jimmy Ahern

In recent years, healthcare companies as a whole have outperformed the broader market. Many trends in the healthcare sector such as telehealth (connecting patients and health professionals) and wearables (wearable electronic devices that send data to doctors) were advanced and accelerated due to the Covid-19 pandemic. Since the beginning of the pandemic, the medical technology market has grown by 10-14% in comparison to just 4% between 2017 and 2019. Healthcare stocks have risen, and top performing companies are posting stock gains of up to 116% in areas including medical technology, rapid diagnostics, and healthcare payments.

Several promising new technologies in medicine emerged from the pandemic, forcing healthcare into the future, and many of these technologies need to be used together. Public hospitals and healthcare companies are having to alter the way they treat patients and manage data, through the implementation of AI and machine learning, as well as 3D printing solutions, and according to the World Economic Forum, more than one billion people will need reskilling in medical technologies by 2030.

There are Many Promising MedTech Investment Opportunities

Technology trends are expected to grow, and the medical technology sector is not immune, with technologies such as cybersecurity, 3D printed devices, 5G technologies, medical robots and AI and machine learning among them. Some of the most promising investment opportunities lie amongst the following areas within the healthcare sector:

Remote Patient Monitoring (RPM)

RPM allows doctors and health professionals to monitor patients without them being physically present, allowing for faster response times, better patient outcomes and significant cost reductions. RPM devices witnessed a global impact from Covid-19 with a positive demand across all regions and the market is expected to grow to USD 101.02 billion in 2028.

There’s a growing prevalence of chronic diseases such as diabetes, cardiovascular, and respiratory diseases, and around 1.13 billion patients worldwide suffer with hypertension according to the World Health Organisation (WHO). There is also an increasing prevalence in chronic diseases affecting the geriatric population, an age band which is expected to reach 1.5 billion by 2050 according to the WHO. RPM allows for up-to-date continuous monitoring of these patients, checking vital signs and allowing for effective management of the disease.

Artificial Intelligence (AI)

AI takes on many different forms in healthcare, primarily utilized for evaluating large amounts of patient data via machine learning. This can assist physicians by suggesting diagnoses, treatments and medications based on the data gathered from the patient’s medical records and history, as well as current symptoms.

AI will radically shape the dynamics of many industries, and according to PWC it could potentially contribute USD 15.7 billion in 2030. Incorporating AI and machine learning into healthcare can help increase accessibility to healthcare, provide early recognition of risks and real-time data, as well as offering time and cost efficiency by taking the load off clinicians. In order to reap the benefits of these trends, daily routines need to be adapted to advanced technologies, so that they can be integrated into the future of healthcare.

Digital Therapeutics

Patients with chronic illnesses require ongoing care such as symptom monitoring, behavioral changes, medication adjustments, and patient education. They can use an application on their personal computer or smartphone, and information about their wellbeing is reported back to their doctors who can prescribe digital therapeutics to their patients for specific medical conditions. This allows physicians to monitor their patients without them having to wait for appointments and physically seeing them on a regular basis.

Judging by the sheer amount of money funnelled into this space, investors are taking a huge interest in digital therapeutics. These include technologies related to telehealth and women’s health, wearable tech for monitoring health, and digital health apps. 35 to 40 digital therapeutics have been approved by the FDA since 2017, showing promise for mental health and substance abuse in the coming year, and the market is predicted to hit USD 13.1 billion by 2026.

Technology in Mental Health

Over the past years, several new technologies addressing the ongoing mental health needs of patients have emerged. This includes additional tools to help patients between appointments, as well as cognitive behavioral therapy (CBT) used in digital therapeutics.

Despite economic pressures and market downturn, investors expect digital health in 2023 to bring in an estimated USD 15 billion to 25 billion. Many venture capitalists (VCs) are optimistic for 2023 and see bright spots for innovation in this sector and are expecting to make roughly the same number of health tech investments this year as last year. They believe that there is tremendous potential for value creation and that the overall ecosystem is quite healthy.

Internet of Medical Things

The invisible network formed by physical objects connected to the internet is what is known as the Internet of Things (IoT). For healthcare, this encompasses technologies such as wearable sensors and RPM. More than 500,000 web-enabled medical devices are interconnected with the purpose of providing accurate patient data, allowing physicians to monitor patients systematically and holistically.

The increasing technological advancements and growing expenditure on the Internet of Medical Things (IoMT) in healthcare are anticipated to bolster significant investments while transforming and boosting market growth in the healthcare sector. The global market size of the IoMT is predicted to reach USD 187.6 billion by 2028.

Make Wise Investments in the MedTech Sector

From increased hacker attacks and risk of misleading diagnoses to tight labor market and logistics concerns, some of the major challenges faced by the healthcare industry have initiated current and new medical device technology trends. There are many investment opportunities on the horizon as cutting-edge medical device innovations are set to continue overhauling the market in the foreseeable future. Carefully consider which sector you wish to invest in by thoroughly researching, weighing out all the options and considering the possible outcomes.

Open source resources are paving the way for discovery and innovation across countless disciplines. Scholars, scientists and software developers alike are realizing the benefits that this type of collaboration can have for their respective industries and the world as a whole, as they work toward making open source a standard practice. Numerous verticals have demonstrated how open source software allows developers to balance customization. The seamless integration creates better products and more satisfactory user experiences, yet the healthcare industry has proven to be more apprehensive. In order for healthtech companies to get the maximum benefits of the open source community, they’ll need to address these three concerns.

Regulation

The beautiful thing about open source software is that the transparency and reduced barriers to access make the programs universally attainable and infinitely pliable. Developers can realize great potential if foundational software become public commodities, but there need to be systems in place that ensure open source software are regulated and reliable.

In the world of healthtech, regulation is a difficult and compound issue. In addition to the standard concerns of regulating open source software, such as licensing practices and reliability of the program, the primary concern of healthcare providers is that the tools they use give results that are medically sound. Many software solutions in the healthcare industry optimize hospital workflows or facilitate communication between providers and patients, but others affect treatment or medication management directly. Individual providers will be reluctant to use any software that isn’t vetted by the medical community as a whole. Open source software in healthcare also presents a dilemma of culpability. In the event that a program built on open source software fails and results in adverse effects for a patient, who can be held legally responsible? The medical and tech communities have to intersubjectively determine the criteria that open source software has to meet and a body that can make sure regulations are being followed.

Compliance

Few industries have compliance guidelines as rigorous as in the field of healthcare and the software that providers utilize have to pass a litany of security standards. No matter the size of the organization, or whether the information is stored in on-prem servers or in the cloud, the sensitivity of the information requires a heightened response to security risks. Robust endpoint protection, comprehensive backup and disaster recovery plans and end-to-end encryption of all information in transit are fundamental qualities of a secure system. Within institutions there are also regulations that determine who has access to certain patient information, which means that healthtech companies need to prioritize access control functionality as well.

In the United States, HIPAA is the foundational piece of legislation for compliance regulation and supplemental medical privacy laws can vary from state to state. Software that’s developed with the intention of being open source needs to take into account the fact that compliance regulations aren’t a static issue. Legislation is constantly evolving and isn’t homogenous across territories. In order for the medical community to get on board with open source, they need to be assured that they can easily rewrite software or integrate with APIs to adhere to current compliance standards without leaving their programs vulnerable or creating bugs. Currently, only enterprise-grade open source software facilitates HIPAA compliance. Developers looking to get into the healthtech space need to keep that in mind when building their product roadmaps.

Incentivization 

At a high level, the possibility of collaboration and innovation are exciting qualities drawing people toward the open source movement, but developing software isn’t something people typically do just as a hobby. Even if many people enjoy writing, editing and improving code, they need to be incentivized to put in the time and effort. Historically, money is a great motivator in both the tech and healthcare industries. There is a well-paved path showing how people can profit from licensing proprietary software, but the ways to make money off of open source software are more obscure. In that way, convincing people to invest in open source is much more cumbersome. 

While a devotion to the well-being of others is a guiding value for healthtech businesses, they’re also selling products and services just like in any other industry. Leaders in this field are beginning to recognize the potential of making large returns on investments when developing open source software. Individual developers list altruism, community recognition and potential for professional opportunities as reasons to write and contribute to these programs. The challenge of the open source movement is to either think of how businesses can be monetarily incentivized to develop open source software, or to expand the non-monetary benefits that individuals see in a way that motivates larger organizations to participate. Others suggest that it’s not the healthcare institutions rather than the developers who should be incentivized to invest in open source software because of how it can ease the burden of IT infrastructure costs overall. 

Innovation from open source software has the potential to revolutionize the healthtech industry, strengthen our healthcare system and increase access to medical care globally. Resolving the questions of regulation, compliance and incentivization are the steps in bridging the gap between the spheres of open source and healthtech. Technological advancements in health and medicine have boundless capacity, which makes the entire world—not just software developers and medical providers—stakeholders in integrating these practices.

Business incubators serve a function that is sometimes overlooked in the birth of a startup, but for a fledgling company they can be the difference between success and failure. They can be defined as organizations that support the development of start-up companies in their very earliest stages—effectively, they turn an idea into a functioning business, transforming an embryonic startup into a confident and independent company.

A business incubator might provide a range of services or assistance, from management training to initial funding. But how does a business incubator help in practical terms—and how does it differ from other forms of early-stage business assistance?

What’s the difference? Incubators and Accelerators, Venture Builders and Venture Capital

Business Incubator

The purpose of a business incubator is to stimulate innovation, and thereby create successful new enterprises. It’s a role they play at the most embryonic stage of a business, when it is at its most fragile but full of pure potential.

Business incubators are likely to collaborate with founders or entrepreneurs from a range of fields, with a variety of different business concepts. The incubator will assist the founder in developing their initial idea (or business offering), helping to fine tune or craft it so that it meets the demands and requirements of the market.

Assistance will be offered in the form of mentoring and other types of support but can also include more tangible resources, which might be physical space, staffing, or equipment, depending on requirements. It may involve an injection of capital. All assistance is likely to have a laser-like focus on the individual needs of the company.

Business Accelerator

Business accelerators, by contrast, assist companies which are further along their development journey than those aided by incubators. They are most likely to invest in companies with a proven business model and perhaps demonstrable market presence or customer base. Although there will be an element of coaching—and perhaps provision of infrastructure—the main purpose of an accelerator is to help startups grow by connecting them to investors and/or providing direct funding.

Business accelerators are most appropriate for a company from the stage of pre-seed to Series A funding and it is likely to be a short-term relationship lasting several months.

Venture Capital

Venture capitalists (VCs) will invest in companies which show, above all, clear potential for rapid growth. Individual ‘angel’ investors or pooled investment funds will seek out private equity opportunities to invest with the hope of turning a profit.

To get any support (beyond funding) from angel investors or a VC fund, companies will need to have secured a very significant financial investment (so there is more at stake for the investor).

Venture Builder

A venture builder has a far deeper and longer involvement with a company than any other organization mentioned here. It first ‘synthesizes’ concepts or ideas for new businesses, and then headhunts individuals to develop them. In a way, it combines incubation, acceleration and venture capital—but significantly, a venture builder takes on the role of co-founder. The relationship is likely to last a number of years and will only end when the startup is sold, with maximum ROI as the ultimate aim.

Although venture builders offer fascinating opportunities for business development from ground zero, if the wheels of a company are already in motion, an incubator is a more appropriate proposition.

The Importance of Business Incubators for Startups

The reasons why business incubators in particular are so important are myriad. The environment provided by an incubator will be hugely supportive, inspiring innovation within the firm and supplying insights and knowledge from without, to help companies evolve and generate solutions rapidly.

From a mentoring perspective, a business incubator can provide experience, as well as state-of-the-art technologies and equipment (as needed), new ideas and diverse skillsets. They are also instrumental in helping new startups navigate challenging markets—or perhaps enter new markets that they may not have considered relevant.

They also present opportunities beyond the purely commercial or business focused. In terms of involving staff in the process of development, a culture of innovation can be nurtured at the company. They might be able to encourage new directions for research and development. Overall, they can expand the vision of a company in ways that capital alone simply cannot.

As with any business relationship, the key to a successful incubation is setting goals, and defining a scope and focus for the process. The incubator and startup should be completely aligned and communication must be excellent. Ideally there will be a clear timeline for the relationship—and above all, there should be a long-term plan for the moment when the startup ‘hatches’ and takes flight on its own. 

Incubation + Venture Capital: A Recipe for Success

Venture capitalists and business incubators are equally important to a startup and leveraging the benefits of both can maximize the chances of success.

Incubators are there to offer guidance to a new business in that delicate early ideation stage, helping to create business strategies, providing validation of those very first concepts and ideas. Following that, VC assists with the next stage of a startup’s development, with pooled investment funds offering a significant financial boost, propelling the startup to fulfil its potential.