Although the coronavirus pandemic negatively impacted various sectors, the digital health industry has emerged as one of the health crisis’s main beneficiaries.
Digital health technologies helped to bridge the forced physical divide between doctors and patients. Technology helped develop remote medical monitoring platforms to help healthcare service providers address the medical needs of patients located in remote areas.
According to data researched by Trading Platforms UK, the total digital health industry funding grew by 55.39%, from $13.9 billion in 2019 to $21.6 billion in 2020. Between 2010 and 2020, the industry’s total funding was $91.7 billion. The findings are based on public data available through December 31, 2020, on seed, including the accelerator, venture, corporate venture, and private equity funding only.
Pandemic and recovering economy fuels digital health funding
The coronavirus pandemic was the main driver of funding in the digital health industry. During the health crisis, digital health solutions’ consumer products gained prominence, attracting interest from consumers, investors, and entrepreneurs. The increasing funding came in amidst a record stock market rebound, development, and successful rollout of vaccines.
Furthermore, 2020 witnessed a revival of the Initial Public Offering (IPO) activity, and several digital health companies went public while others announced plans to go public. Overall, venture capitalists poured money into startups, and billions of dollars of value were created with IPOs taking center stage.
The sector also witnessed an influx of investors after receiving support from various governments and organizations worldwide. The crisis compelled governments and hospitals to adopt models such as telemedicine swiftly. The government’s endorsement of digital health products acted as a boost for the sector as most investors were confident of positive returns in the future due to a conducive environment.
The future of the digital health industry
Moving forward, it will be of keen interest to see if the industry will retain the gains made amid the pandemic. However, one major concern will be how the sector handles sensitive patient data and sustains business models. These factors might impede the sector’s growth.
However, the industry is likely to attract more investment, reinforced by tech-driven transformation and legitimization of business models, strong clinical and economic outcomes, and increasing approvals from authorities.