As economies across the globe continue to contend with coronavirus, the healthcare industry has led the worldwide campaign to subdue the impact of the pandemic. At the dawn of the crisis the healthcare industry was forced to react and rapidly tailor their services such as delivery points and processes in order to comply with the new enforced pandemic protocols. Now, as the scale of the pandemic is surging and fears of a second wave increase, the healthcare ecosystem is constantly mobilizing more resources in a bid to effectively manage any unforeseen future developments in the pandemic. This shift from reactive to proactive has resulted in an increased volume of investments. These investments are not only responding to the new epidemiological requirements but also the major healthcare inadequacies that COVID-19 has brought to light in recent months. This global mobilization of the healthcare industry has been headlined by the Global Preparedness Monitoring Board which requested a minimum of $8bn in emergency financial support, the US which has set a rescue package of approximately $2tn and the UK, Europe’s hardest hit country, which has spent over £330bn – around 15% of their GDP – in an attempt to repair the economic damages of the pandemic and to subdue the monumental health threat that COVID-19 still poses.
Flexibility and Growth of Healthcare Startups
COVID-19 marks the first time that governments have entrusted private players of the industry with such a vast responsibility. Whether it be deployment of equipment and staff, preparation of quarantine beds and stations or wide-scale testing, the private healthcare sector has been supporting every governmental decision with incredible speed and efficiency. Healthcare startups have particularly risen to the occasion, immensely contributing to the entire rescue and recovery effort. Due to their relatively small-scale operations, the flexibility of startups have allowed them to entirely transform and to redirect their strategies towards helping to combat the pandemic. Since lockdown began, the number of users of online consultations and telemedicine has seen a meteoric rise, leading to the growth of E-health platforms. As a result, health tech is now the second biggest sub-set of the United Kingdom’s tech sector, above all thanks to the incredible performance of healthcare startups in the last decade. Elsewhere, healthcare startups are booming across the globe, providing innovative and modern solutions to the new demands sparked by the global pandemic. Health tech startup Practo Technologies has introduced an online platform through which a doctor can be appointed to a patient within 60 seconds of listing their specific health concerns. In a matter of just 6 months, the success of this cutting edge service has generated a growth in their business of a whopping 600%. Clearly, healthcare startups are proving their worth, with those specifically targeting their efforts on tackling the virus and its ramifications being the veritable vanguards of the healthcare sector.
Healthcare Startups: The New Investment Hotspot
Between March 23rd and April 27th startups in the UK have raised $825 million, a 34% increase from the same period in the previous year, making the British healthcare industry the sector with the largest startup investment, signaling its enormous success of late. Rightangled, a UK-based healthcare startup, has developed a PCR lab-based test kit for COVID-19 that is delivered to users’ doorsteps with the results communicated online within just 24 hours. Inevitably this innovative solution has caught investors’ attention; the company raised 1,045% of their initial target of £50,000, which, given the bullish markets at the time, is an unprecedented and promising show of investor enthusiasm and trust. After four rounds of funding Rightangled has raised a total of £1.3 million and hopes to continue this funding trend in order to meet the hundreds of thousands of orders the company is receiving from individuals and corporations. Having appeared on major news channels such as CNN, Sky News, LBC, Daily Mail, and The Telegraph, Rightangled and healthcare startups in general are set to grow even further with their success very much visible to the public eye. Zegami, another UK-based startup which developed a diagnostic tool which differentiates coronavirus infections from other forms of pneumonia with an accuracy of about 70% has a similar success story, having raised a total of $6.2 million in the funding of its tech-based solutions. However, Rightangled and Zegami are just a few of many hundreds of examples of successful healthcare startups which during an economically challenging period have provided high-yielding investment opportunities for investors. While most investors across all industries have experienced a sharp decline in the valuation of their investments as companies halt their expansion plans and reduce their operations in order to prioritize financial survival during this economic downturn, the healthcare industry has proved to be the silver lining. Despite a drop in the number of international patients, transplant operations and other serious-illness diagnoses as a result of the quarantine restrictions, the healthcare sector, and most importantly startups, are at the veritable nucleus of the fight against the coronavirus and are consequently proving to be phenomenal investment destinations.
Analytics by: Tasneem Mayet