HealthXCapital

1. In your opinion, how has the MedTech Startups landscape evolved over the years? What are some of the advantages of the current technological evolution?

Its important to shed light on the context and drivers of healthcare in the Asian region.  Asia is home to around 60 percent of the global population of which roughly greater than 25 percent is likely to be aged beyond 60 years. Further, almost 50 percent of the global chronic disease burden is likely to be in Asia. There is a very huge need for healthcare for this needy population however we are woefully short of the required resources. With less than 1.25 doctors per 1000 patients and less than 2.45 nurses per 1000 patients, the gap is too large to bridge the demand and supply within healthcare. Here is where technology is fundamental to healthcare and the reason why we are witnessing growth in this space in the region. Technology is enabling innovation in business models, products and services such that healthcare is being more accessible & affordable to the patient population. 

"Technology is enabling innovation in business models, products and services such that healthcare is being more accessible & affordable to the patient population."

In the last decade, health tech startups have grown from innovation in business models to IP and now startups driven by data assets and analytics. From roughly $5Bn invested in 2019 to projected capital investments of $20Bn in 2025, the space in APAC is likely to witness steady and increasing capital. This signals rapid growth in the startup ecosystem. Roughly 40% of this investment is going into South and South East Asia with an equal split between the two sub-regions. The evolution can be seen in waves and the first wave was mostly into bringing efficiencies into the healthcare ecosystem by way of business model innovations. The initial cohort of startups witnessed momentum in the online consolidation of one or more services. For example, several online platforms for clinic management, appointment booking, pharmacy delivery, surgery, etc came up such as Pharmeasy, 1-mg, speed doc, doctor anywhere, halodoc etc. All these took years to scale as scaling such services was correlated to the local regulation as well as consumer adoption. 

Subsequently, data-driven AI related startups were another area that emerged in South and SEA given the relatively easier access to data. These included startups that trained algorithms to ready pathology images, MRIs, X-rays, etc so that the pathologists/ radiologists, etc could read images more efficiently and accurately. e.g: Sigtuple. Thereafter came the data analytics-related startups which had access to data associated with a single specialty and they mined information to create insights/ solutions to a variety of problems that needed to be solved by the pharma/provider sector. Holmusk, Biofourmis, Child Health Imprints, THB all belong to this category. 

Lastly, the med-tech space which is more associated with medical devices/hardware-related startups is still at a nascent stage of the innovation life cycle given the long gestation periods involved and the relatively slower scale in the region. My belief is that device related IP innovation will for the next few years largely scale more in the western markets and once its scaled and gathered credentials there, it will make its way back to Asia or until then scale slowly in this region. 

Key advantages of technology evolution:

•  Technology has made several healthcare services accessible to people given the high mobile phone and Pc/internet penetration in emerging Asia. For example, today one can virtually consult a doctor through one of the online tele-consult platforms, get an e-prescription, order pharmacy home and order other services e.g nursing at home. 

• Technology has enabled better efficiency, accuracy and hence better outcomes in diagnosis. E.g: AI in healthcare has increased throughput in reading images, identifying problem areas in scans more accurately etc.

• Technology has also enabled digitalization of healthcare data and therefore more exchange of data, mining, and insights for further application such as - chronic disease management, real-world evidence for pharma cos, point -of-care diagnostics (enabling remote care and homecare). 

2.  What according to you are some of the challenges plaguing the MedTech Startups landscape and how can they be effectively mitigated?

 Some of the key challenges plaguing the health tech startups in the regio

• the early stage is relatively lesser capitalized and the valley of death is longer; therefore more challenging for startups to cross over to later stages

• healthcare is complex: multiple stakeholders to line up before commercializing and scaling health tech namely providers, regulation, clinicians, patients, data, et

• gestation periods for the growth stage are relatively longer as compared to general tech startups e.g fintech, consumer tech

• IP innovations are slow to scale due to slow adoption which is usually correlated to the market maturity. Most IP innovations are likely to drain out to the western markets whilst slowly undertaking a parallel but smaller scale-out in South and Southeast Asia at least for the next 5 years. 

• Mindset to induct new tech is changing but has some time to go before doing so at scale and speed. Hospitals still prioritize clinical outcomes, business stability, quality, compliance. Fewer budgets and time are spared for innovation although things are changing in a positive direction.

 3. Which are a few technological trends influencing  MedTech Startups today? What are some of the best practices businesses should adopt today to steer ahead of competitors?

Trends     

• Online tech platforms consolidating demand for a/multiple healthcare services will continue to drive scale and initial success stories.

• Since data is relatively more abundant and accessible in South and Southeast Asia, creating data assets, mining and insights-based businesses are also likely to create valuable assets in the long term.

• AI associated algorithms and efficiency systems will continue to complement traditional healthcare delivery

• Digital health interfaces will ring-fence hospitals and increasingly more healthcare components will be delivered virtually saving time & cost for the patient whilst adding convenience

• Interoperability of data, monetization of patient-owned data, and securitization of data via NFTs are likely to be long-term value-generating segments in healthcare.

• More healthcare is moving out from the hospital to clinic/ nursing homes and finally at homes courtesy wearables, devices, and point of care diagnostics. This trend is likely to continue.

4. Do you have any advice for industry veterans or budding entrepreneurs from the  MedTech Startups space?

Best practices & advice:

• Clear value proposition addressing a distinct and real need by an individual/patient

• Go to market strategy should involve avoiding re-inventing the wheel for relationship building with a client. Strategic collaborations and partnerships are key to early breakthroughs for startups especially for health tech

• Cap table is very important; Investors brought on should either add strategic value, network, or follow on capital or a combination of the three.

• Focus on team and technology should be paramount and it should be budgeted for within the capital raise.

• Steady growth and quality of revenues are key to healthy valuations and fundraises. 

 • Disproportionate scale platforms should be explored in health tech - Banks, telecom, insurance, utilities. each of these has a very large consumer pool and if either of these platforms can offer health tech services, healthcare, in general, becomes more democratized, accessible, monetizable, effective.