Conceptualization of the fascinating health-tech startup world and key funding trends

1. HEALTH-TECH: WORLD
OF ENDLESS
OPPORTUNITIES
BY ANIRBAN BHATTACHARJEE
Report on disruptions key
trends & future scope of the
Health Tech Industry
MOS Assignment

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What is the article?
It’s a concise read covering many interesting aspects of the less uncovered health tech industry which
is fast booming. Contrary to the perception of the life-sciences and healthcare industry to be a digital
laggard the industry has started adopted Industry 4.0 technologies across the value chain from drug
manufacturers, to clinical trial bodies. to hospital and care services.
Covid-19 ensured that the adoption rate of these technologies increased for all countries. Especially in
India even before Covid-19 the need for frugal innovation along with a budding healthcare tourism
industry ensured startups and incumbents alike invested heavily to develop these technologies.
Government too realized the potential and augmented the process by changing archaic regulatory
processes and ensured ease of business adoption which is not only effective but also economic.
The article then goes on to uncover through primary data analysis of funding, deal size of the last 5
years to unearth the fastest growing and largest sub segments within the large ecosystem of health-
tech industry. Key trends and changing business models were observed. Special attention was paid to
top 3 dark-horse segments in my opinion: Anti-Counterfeiting Tech, Tele-Medicine, Rise of VC arms of
Tech Giants.
Just a look at the below survey results from Deloitte Centre for Health from 2015 shows the latent
nature of the demand for tele-medicine services. Come Covid-19 it’s a real business proposition for
most companies in the healthcare chain. The KSA, UAE and Indian telehealth markets have reached a
tipping point with growth of more than 200% during the pandemic. Virtual consultations by healthcare
professionals will become the mainstream care delivery model post-pandemic.
Read on to find more such insights!
Finally the article ends with looking at the few technologies which will become the mainstay of
healthcare products, services and applications in the future.

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The entire document has been converted into a concise presentation uploaded on Slideshare whose
link is shared in the reference page.
Why did I write it & for whom is it intended?
Coming from a pharmaceutical technology UG background I always had the knack for closely following
the life-science industry. With the industry now rising to the world of digital technologies it married 2
of my special interests Technology & Healthcare. Together commonly known as the Health-Tech
Industry it presents myriad of opportunities for investors, academics and the common curious
enthusiasts to delve into and enjoy, for whom this article is intended for. The style has been hence
kept mostly infographic and less text heavy. I tried to use the info-cards model used by companies like
In-shorts, INC42, Crunchbase to present a wide topic in a crisp & engaging manner.
Traditionally VC & PE funding has been very low in healthcare compared to other sectors primarily
because of the mismatch between high capex and low ROI. Surprisingly only 5% of private funded
health-tech startups have made it into a successful IPO or leveraged buy-out. Hence the low media
attention when compared to startups like E-Commerce, IoT, Robotics, AR/VR, cryptocurrency, e-
autonomous vehicles etc. The following is a visual is a representation of the same.
Acknowledgement
For a long time in my 2 years of MBA I felt like a white tiger and this exercise gave me the opportunity
to express my opinions about an industry which I adore but most of my peers ignore. I am hereby
extremely grateful for Dr. Neeru Bhullar to give me this opportunity.

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The Healthcare Industry 2020:
Key Insightsv
Segmentation of Market: The healthcare
industry includes various sub segments:
The major ones: pharma/life sciences,
medical devices, care delivery services,
insurance/payers distributed across the
service chain segmented into Prevention,
diagnosis, treatment care
Virtual consultations by healthcare
professionals will become the mainstream care
delivery model post-pandemic. , 73% of the
deals in 2020 globally have been seed/angel or
early-stage deals indicating that this industry
has a lot of opportunity for investors
Funding Trends: 2020 funding remained as
per the projected standards at 48 billion $
(including private equity deals). Growth
driven by the further rise of digital health
companies & biotech drug development.
Informatics and artificial intelligence (AI)
solutions addressing workflow automation and
operational analytics will witness 100% growth
in 2020. GE Healthcare‘s industry-first, FDA-
cleared Critical Care Suite AI tool. Teleradiology
& new patient delivery models for critical care
The rise of biotech: Both in terms of deal
size & funding. Med/biotech hits its
highest funding quarter since 20I8
Med/biotech funding reached $6.2 billion
in Q1 2020, the highest quarter ever since
Q3 2018
Rise of Covid-19 & Other Infectious Diseases:
Although diagnosis & treatment of lifestyle
diseases were the primary area of focus the
5bn $ estimated infectious disease market
became the centre of attention. Walgreens &
CVS trying alternate models from traditional in-
vitro testing
The following are the key trends observed in the Health-Tech Market after
analysing private funding data from CBInsight, Crunchbase over the last 5
years

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* Created by Anirban Bhattacharjee
Collaborative
Research:
Driven by AI
Pharma Companies
Clinical Research
Tool: Smart
clinical trial
shortlist,
advanced decision
support,
interactive forms
Genomics
Research support
Smart Insights:
AI engine to
derive insights
from data
Solution Core
Engine:
AI-ML
Health
Engine
+
Unified
Analytics
and Data
Visualizati
-on
Data:
HIPAA
compliant
single
database
Partner
Web:
Network
of
wearable
firms,
digital
health
solutions
and life
sciences
firms
Security:
Realized
using
block-
chain
based
storage
Doctors
Health Monitoring System:
Patient monitoring and
engagement, smart decision
support, emergency alerts
Patients
Patient Engagement App:
Real time vital and behaviour
data collection, personalized
recommendations, AR driven
gamification, FDA approved
cure & solutions for all ailments
under one umbrella
Insurance/Payers
Treatment Performance Analyser:
Helps in Outcome based pricing
based on analysis of patient data
Real time
assistance
Best practices + Knowledge
Support
Outcome based
premiums
Data
+
Insights
Data
Vitals
Data
Alerts
Patient
Data
Key Takeaways
Healthcare’s reliance on digital technology has risen. Healthcare 4.0: Patient wearables, data
analytics, patient monitoring systems
Growth of quantum tech, AI in drug development as well in the technology which acts the
medium of the healthcare service
Covid-19 has increased the growth of companies involved in support systems eg IT, ITeS, Supply
chain transformation eg temperature controlled chains, blockchain
Shift to outcome based care from value based
Challenges
Siloed data | Privacy of data | Cost pressures & price ceilings by regulatory bodies |
Heterogeneous regulations| Hyper competition in generics
THE NEW HEATH-TECH MODEL

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Global Giants Abbott, GE, Phillips opened incubation programs leading to medtech
funding comparable to global average
Patient Monitoring
systems generated more
funding than expected,
owning to telehealth
demand
Global Giants Abbott, GE, Phillips opened incubation
programs in India leading to medtech funding(India)
comparable to global average
Among CBInsights top 150 startups clinical
intelligence biggest technology while healthcare
software & services biggest sector
Biotech increase in total funding over the
last 5 years. Maximum over other categories
in healthcare
Largest funding/deal:
Drug Discovery & drug development 2
nd
fastest growing segment and still has
Average Medical device funding growth (*last 5
years). Remained constant. Funding/deal has
decreased. Highest funding in Imaging, surgical &
therapeutic devices
India’s Med-tech funding/deal (2020)
In India funding in line with global average.
Highest funding for AI enabled healthcare
services
1
2
3
4
27
%
17.8 mn
$
~2%
5.2
mn $
KEY NUMBERS FROM PRIMARY ANALYSIS
KEY
TAKEAWAY

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KEY AGENDA: FOCUS ON POST COVID TRENDS
Till now we have talked about general trends observed globally by studying number of start-
ups, funding, deal size etc. across sub-segments of health-tech industry however henceforth I
would like to briefly explain the 4 major disruptive trends exacerbated by the post Covid-19
world. Also it has been observed whenever there is a structural change in an industry,
companies executing support functions like IT, ITeS, logistics (for example need for better
supply chain in India for temperature controlled storage, and transport of vaccine) show
greater growth and it’s wise to invest, associate or partner in such companies during this
phase.
Besides the blockbuster companies which generally hog the limelight for example vaccine
developers, contract manufacturers like Bharat Bio-tech & Serum institute in India companies
capitalizing on these 4 trends may be the dark horse when it comes to ROI for investors.
Potential employees, investors and tech lovers will like to keep an eye on these following
trends.
Telemedicine: India recently passed the Telemedicine Bill which brought changes in the
regulatory policy allowing online diagnosis, treatment and care of patients in India.
Syringe Counterfeiting: With the increase in online sales of prescription drugs counterfeiting
has struck the med-tech industry hard. According to a research by PWC around 50% of all
prescription drugs online are fake. Companies providing anti counterfeit technologies have a
huge Total addressable market.
The Rise of Tech Giants as Healthcare VC firms: VC arms, incubators and start-up accelerators
have been developed by Google, Microsoft, Tencent, Samsung, IBM to invest in early stage
startups disrupting the status quo. This coupled with not enough funding from incumbents of
Lifesciences industry or their corporate VC arm has given these giants a 1st mover’s
advantage. With new age health-tech companies building products & services for the digital
word these companies believe that their existing ecosystem can help create long term
synergies.
Improved Supply chain 4.0: Technologies like NFC, block-chain, IoT ensure that a temperature
controlled inward and outward logistic + warehousing can be done which ensure live
monitoring of the transported drug while ensuring full supply chain visibility.

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The Covid disruption reduced funding of traditional healthcare services. Need for faster care
delivery models propelled the growth of tele health startups.
Faster internet connectivity, penetration and platform based health tech companies ensured
the way health care services from screening to post treatment care, from primary to
secondary care can be transferred in-house. Live monitoring, in home testing were key trends
in terms of % increase in startups in that space or increase in both seed care funding and
later stage PE funding. Few Insights from analysis.
MAJOR DISRUPTOR: TELEMEDICINE
81
bn $
21
%
% Representation in top 150
digital startups CBInsight’s list:
Estimated Market
Potential
62
%
Teleconsultation & Specialized Tele Services in
India as a % of total Tele-heath Companies

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Health Tech Disruptions Post Covid-19 in Tele-medicine:
Supply Drivers: Low entry cost, ready availability of trained talent & the goal of scaling up
manufacturing in India, start-ups can thrive.
Is there a Supply Gap?
Low intensive care beds, ventilators and personal protection equipment for caregivers of those
infected by the virus. In countries with state-funded healthcare systems, the response to the virus
was the most effective. Singapore, Taiwan, New Zealand and Japan are some of the countries that
were able to have some control on the pandemic due to uniform healthcare
Primary growth in demand has been however for final medical delivery of services, in the form of
Tele-heath. Primary Healthcare can be achieved when AI-based primary healthcare can be delivered
at a person’s home continuously and comprehensively. This can streamline the rest of the healthcare
system as well.
Faster care delivery
The average wait time to see a physician for the first time was 24 days in 2017, a 30% increase from
2014. This problem may only get worse given an aging population — with the number of seniors in
the US set to reach 80M by 2040 — and a shortage of doctors. It’s estimated that this shortage will
grow to 122,000 physicians by 2032, according to the Association of American Medical Colleges
(AAMC)

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Barriers to change:
 Resistance to change. Only 5% of people over 65 have tried telehealth, according to a
2019 survey from JD Power. Telehealth will have to become more approachable for
older patients who may be resistant to new technology or formats.
 Perceptions about quality. Slightly less than half of respondents in the same survey
said that telehealth visits are lower in quality than in-person visits, citing the lack of
personal touch and connection with the physician.
 Connectivity and infrastructure. Patients in rural areas are less likely to own
smartphones or have the broadband internet connection necessary to deliver
telehealth services. Spotty service can be a major roadblock, especially for high-acuity
treatments that require a constant, stable connection
Roadblocks in adoption
Licensing and credentialing, Malpractice liability, Data security, Upfront costs, Interoperability
USE CASES: For example, telehealth company Amwell enables primary care physicians to meet
patients by audio or video within 30 minutes of requesting an appointment after completing a short
questionnaire. Similarly, 98point6 offers a text-based service that allows patients and doctors to
communicate asynchronously throughout the day.

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Wearables startups like mHealth and TytoCare allow for continuous or periodic collection of patient
data, while companies like LetsGetChecked and Scanwell Health enable remote testing and labwork.
Remote patient monitoring tools like these have been shown to reduce readmission rates among
cardiac patients by about a third.
Demand driver: High cost of primary secondary care plus low insurance coverage
Where Do Big TECH Giants Invest?
• Based on number of deals Data
Management, wellness, genomics top
3 *
• In medical device category: max
investment in diagnostics
• Based on number of startups since
2010 wellness, genomics top category
1. Industry Average
• Microsoft Scale-Up & Microsoft AI
Factory: 35* investments
• Venture arm M12: Late stage funder
• Top invested categories: Data
Management & Analytics and
Genomics companies
• Google Launchpad Accelerator: 17
digital health companies
• The top categories of investment
Genomics (18 deals*), Clinical
Research (15*), and Insurance &
Benefits (12*)
• 31 investment in china & 18 in US
• 84 % investment + 16 % from
Accelerator program
• the two top investment categories by
deal volume are Clinical Research and
Administrative Tools
Importance of Digital Tech
AI, ML and Cloud forming the backbone of
healthcare analytics
Lifesciences 4.0 with a patient centric
personalized medicine
Startups Invested in
*Refer appendix for data visualization

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Pharma
Company
Initiatives
Brand
recognition
Regulator
y Control
Consumer
Education
Tech
Based
Tracking
Retailer
Recognition
SYRINGE COUNTERFEITING
Benefits
of
AntiCounte
rfeiting
US$163 billion to $217 billion in lost sales | 10% of all medical products counterfeits | WHO
Estimates 50% online medical products as fake
Market potential: loss in costs 1–2% of revenues & loss in revenues is 0.7–1.4% of revenues.
Avg Time to Re-USE after counterfeit reporting: 88 months
B) Device components: Example cardiovascular and orthopedic
implant product lines
Types Of
Counterfeit
products
A) Finished Products: Mainly blood glucose monitoring systems,
surgical sutures, catheters and heart valves.

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Nano-Tech
Nano barcodes
Holography
Nanocomposit
e tags
Laser surface
authentication
Block-chain
based
Supporting Tech
unique
cryptographic
identifiers
smart tags
IoT + Cloud
Quantum
Dots
Implant SER
technology
Encoding
Technology:
Quantum Codes
Master
batch
variety of
polymers
polyamides
Acetal (POM)
PP, PE, PC
Traditional Classification of Anti-Counterfeiting
Technology
Covert: 60% of all
technologies
Overt: 10% of all
technologies
Forensic Analysis: 30%
of all technologies
NEW AGE TECHNOLOGIES
Challenges
Economic Barriers: Taggants costlier + Cost to
incorporate these packaging techs range from 15-
150 INR/tag
Technological challenge: Technology to read these
covert tech not accessible

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Next-generation sequencing (NGS): Applications of genetic sequencing to identify at-risk populations
or target therapies to patients who are likely to respond
• 3D-printed devices: Lower-cost and highly customized medical technology products that can be
tailored to suit the physiological needs of individual patients
• Artificial intelligence (AI): The ability of computers to think like and complete tasks currently
performed by humans with greater speed, accuracy, and lower resource utilization
• Leveraging social media to improve patient experience: Tapping data from social media and online
communities to give health care organizations the ability to track consumer experience and
population health trends in real-time
NGS
Personalized medicines account for more than one out of every four FDA drug approvals in the last six
years, further expanding precision medicine in healthcare
The FDA approved or cleared 12 personalized medicines and seven diagnostics in 2019, helping
providers address the root causes of disease and rise of precision medicine. Genomic sequencing
facilitates this trend. To support this in 2019, FDA’s Center for Devices and Radiological Health (CDRH)
approved or cleared seven new or expanded in vitro diagnostic tests.
Growth Driver
Researchers working on the Human Genome Project completed sequencing the first human genome
in 2001, and it took 15 years and cost $3 billion. Since then, advances in sequencing techniques have
led to exponential increases in the data output for each sequencing run, from 84 kilobases of data to
1.8 terabases of data. Meanwhile, genome sequencing costs have dropped substantially: current NGS
techniques can sequence 45 human genomes in a day for $1,000
WHAT TO LOOK FOR IN THE FUTURE

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3D-printed devices
Manufacturers and providers could use 3D printing to create highly customized, low-cost medical
technology products that can be tailored to suit the physiological needs of individual patients.
Greater adoption of 3D-printed medical devices will likely depend on the:
• Ability of innovators to demonstrate biocompatible products’ safety;
• Development of a consistent
USE CASES: 3D-printed prosthetics, Surgical Planning
Close to 200,000 amputations are performed each year in the US. Prosthetics can be priced from
$5,000-$50,000, creating access challenges for patients.17 One company, Open Bionics, is an open-
source initiative for the development of 3D-printed hands and arms. Open Bionics prosthetics are
offered to amputees at a much lower cost than traditional prosthetics, ranging from $100- $200
Artificial intelligence (AI)
Within health care, AI includes clinical tasks such as diagnosing patients and spotting disease
outbreaks earlier; accelerating the development of new drugs and devices; and streamlining
administrative duties such as approving claims and rooting out fraud. Frost and Sullivan projects that
90 percent of US hospitals and insurance companies will implement AI systems by 2025

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USE CASE
ATOMWISE: San Francisco-based Atomwise is the developer of AtomNet, a deep learning platform for
novel small molecule discovery. The company has launched 27 drug discovery projects with
institutions such as Merck and Abbvie. 72 potential medicines in pipeline. Funding 6.12 mn $.
Investors: Y Combinator
Applications:
Intelligent drug design, Faster Clinical Trial by automation

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Leveraging social media to improve patient experience
Social media can be a rich source of health care information that could be valuable to patients,
researchers, policymakers, and hospital administrators. Social networks and online communities could
play an important role in consumer health management, serving as hubs where patients and
caregivers can meet to ask questions, share information, and compare experiences with treatments
and medications.
Advantages:
Patient centric delivery model
Better tracking of post treatment care
Quality of Life measures
Figure 1: Use of SM for learning and advocacy of healthcare info among different demographics

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CONCLUSION
The health-tech industry is being disrupted by startups which are unbundling traditional healthcare
incumbents. Take the example of LabCorp which provides lab services & research facilities in USA
across the entire healthcare chain, is a good representation of this phenomenon. The following
diagram shows how host of startups are disrupting the status quo.
Closer home it’s the need for frugal innovation which is driving stratup growth. Low health insurance
penetration & inability of companies to transfer costs onto patients has resulted in this.
Several bio-incubators have been established in the country, such as C-CAMP Bangalore and Venture
Centre, Pune. They provide basic facilities for entrepreneurs to incubate, develop & market the
product. The relevant costs can be covered through schemes such as Biotechnology Ignition Grant of
BIRAC, New Delhi Thus we see right policies, and an appetite of investing along with knowledge
outsourcing and resource partnership among MNC’s, PE and VC firms in the segment have created
an ecosystem of India-based innovation which is expected to bring increase domestic healthcare
consumption.

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APPENDIX AND REFERENCES

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Figure 2: Distribution of funding among healthcare segments for Tech Giants
Figure 4: Number of startup breakup across various application technologies among top 150 health-tech startups by
CBinsight 2020 (*visualization created by Anirban Bhattacharjee)
Figure 3: Breakup of number of startups across various domains within the healthcare value chain,
among top 150 startups by CBinsights 2020

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References
Link for online submission on Slideshare: Click here
Link for SML: Click here
Link for personalization in healthcare by EY: Click here
Link for health-tech trends: Click here, Link 2
Link for Post Covid-19 disruption of health in India: Click here, here
Link for startups disruption medical device industry: Click here
Health Tech watch-list: Click here
Other resources include: Funding data from platforms like CBInsights, Crunchbase, Craft for primary
data analysis

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MIND MAP FOR THE ARTICLE