We’re smack-dab in the middle of our exciting multi-part article series on the six key startup sectors that are going to dominate in 2020 and for the next decade on.
In The Boardroom, we’re considering no less than four new investment deals. And one of them just so happens to be in our next startup sector…
I’ve had my eye on this sector for a while and I’ve invested in some great deals in this space already, and from what we can tell, it’s just the beginning.
I’ve gotta tell you, I’m excited about this next one.
Before you make your next investment deal, you need to check this out:
Sector 3 – Health Tech
It’s a beautiful day outside your window. The sun is shining and the thermostat reads a perfect 85 degrees. But you’re inside. Your body is aching and you’re buried in a blanket as you shiver with chills.
Nothing sounds worse to you at this moment than driving to the doctor’s and sitting in the waiting room. So, you do what we all do and you type up your symptoms into WebMD.
Oh, it says you’re dying. That can’t be right, right?
We’ve all been there. Whether you’re sneezing more than usual or you have a child who might have caught that stomach bug that’s been going around in their daycare, a doctor’s visit can be timestaking and expensive. That is if you can even get an appointment.
The MedTech industry is rising up to solve this problem- and countless others – and the investment opportunities within this sector are exponential.
MedTech – Is That Even A Real Word?
Now, you may be thinking, “How is this a new sector? Isn’t the medical field already saturated in technology?”
To that I say, definitely.
But the cost of healthcare is rising, consumer beliefs around health care are shifting, the insurance industry is still a stagnant goliath, and there are brave new worlds of medical devices and therapy. Technology is making healthcare more personalized, convenient, and effective.
The Health Tech industry covers anything that can be used in the diagnosis, prevention, and treatment of an ailment. And it applies to more than just human health care. Companion animals are also the direct beneficiaries of the breakthroughs in this sector.
Just what are the innovations coming out of Health Tech?
There are cool new devices like at-home blood and saliva tests that can predict diseases, DIY DNA kits that tell you about future illnesses, and virtual therapists who see their patients over a smartphone app, and a CAR-T Cell Cancer Therapy for our canine friends.
Here at The Boardroom, we have been keeping a close eye on this startup sector. A recent investment I made in a Health Tech startup just returned $500,000, many times my original investment. With a global value of $6.5 trillion, the potential angel investing opportunities in this industry are unmatched.
But hey, don’t just take it from me.
Check out the three biggest reasons why we think Health Tech is going to be just what the doctor ordered.
One of the most exciting trends to come out of Health Tech is telemedicine. Over the past decade, telemedicine, the process of consulting with a health professional remotely over the internet or phone, has gone mainstream.
Multiple startups have already created easy-to-use apps that connect patients to health professionals in seconds. Gone are the days of expensive co-pays or office costs just to be told you have the common cold.
But a new wave of telemedicine startups are integrating artificial intelligence to make patients’ experience faster, most cost-effective, and, above all, more successful.
For example, a Seattle-based startup, 98point6, developed an AI-equipped app that connects patients to doctors and pharmacists 24/7. Their AI technology learns from each “visit” and gets smarter each time it is used. And by charging as little as $20 a year for 24/7 digital access to a physician, 98point6 is expanding access to quality health care.
Investors are taking notice. Through only 4 rounds of funding, 98point6 has secured $86.3 million in funding since their entrance in the industry in 2015, and boasts 45,000 app downloads this month alone.
One of the most popular ways telemedicine is being implemented is in the mental health community. Online therapy removes the obstacles of cost and a busy schedule while providing personalized care.
And it couldn’t come at a better time. Mental health awareness and diagnoses are on the rise in the United States. Currently, 4 in 10 adults will see a counselor at some point in their lives, and, every year Americans spend $201 billion on mental illness healthcare.
Currently, the world’s leading telemedicine counseling service, BetterHelp, is a 5-year-old startup with a 2018 valuation of $60 million. They were recently acquired by one of the most influential telemedicine companies in the world – so influential, Forbes called their stock “The Amazon of Medicine” due to their 2018 market capital of $4.1 billion.
You might have missed out on that deal, but you don’t have to miss out on the next one. As patients become more comfortable with interactions online, clever founders will find new ways of providing them cheap, effective treatment.
Because, sadly, it doesn’t look like the mental health or health insurance crises are resolving any time soon.
Artificial Intelligence In Healthcare
At some point in the past five years, I would bet money that you’ve been frustrated by at least one of our leading ladies in artificial intelligence, Siri or Alexa.
But while those two charmers might not always “get it,” AI programs and robots have become extremely sophisticated in medicine. In the past 5 years, AI-driven robotics have revolutionized surgery, imaging, and testing. And there will only be more to come.
Startups are perfecting new softwares and devices that offer 3D imaging, early cancer detection, and identification of anomalies. And a successful application can mean a huge payday for investors.
In May of 2019, Google purchased DeepMind, a company that has been using AI to improve medical care, for $500 million. In the same year, the Journal of the Natural Cancer Institute conducted a study of 42,000 patient scans which concluded that Google’s AI algorithm was 5% more successful at detecting cancers and reduced false positives by 11% compared to the human doctors in the study.
Another success story is Paige.AI, which uncovers new connections between pathology, genomics, treatment response, and patient outcomes with large-scale machine learning algorithms. Paige recently clocked in at a $220 million post-money, more than three times its valuation in 2018.
And we’re really just scratching the surface of the $35B healthcare cloud computing market.
Don’t Forget About Fido
There’s obviously a lot happening in the world of medicine. But what about man’s best friend? (okay, friends)
Good news – more and more Health Tech startups are developing advanced treatments for companion animals.
The primary driver for this trend is the growth in consumer spending on companion animals. Dogs and cats (mainly) are becoming part of the family, and Americans are shelling out the cash needed to keep them there. American consumers spent over $15 billion on pet medicine in 2018, and almost $30 billion on organic and natural pet nutrition. Globally, the pet market is valued at approximately $109 billion.
Startups are responding to this trend in force by leveraging human technologies. AI-automated veterinarian care and state-of-the-art cancer therapies are just the beginning. The top startups in this field have collectively amassed $500 million from funding rounds.
I’ve been a part of several deals involving veterinary medicine startups, and I’ve already seen huge returns. There’s no way this train is stopping.
Headfirst Into Health Tech
As with all of the Six Startup Sectors that we think are going to be big in 2020 (and beyond), Health Tech is being driven by two independent engines: shifting consumer behavior and advancing technology.
Artificial intelligence is allowing us to develop new surgical devices and diagnostic platforms, but patient preferences are making telemedicine the new norm.
Health Tech isn’t just making medicine cheaper or easier to access, it’s making it more personal.
The possibilities of diagnosing cancer through an at-home saliva kit sounds like a thing of the future. But it isn’t. This innovation is only the first of many.
One of my favorite things about being an angel investor in this sector is that I know my investments are actually going to improve people’s lives. Nothing makes profit sweeter.
Want to get in on the ground floor of the next medical breakthrough? Come join us in The Boardroom and see where the future is headed.
Paige.AI Funding Data: https://www.crunchbase.com/organization/paige-ai#section-overview
98point6 Funding Data: https://www.crunchbase.com/organization/98point6#section-mobile-app-metrics-by-apptopia
Pet Care Startups: Numbers