Healthcare entrepreneurs should prepare for an upcoming VC/PE bubble – ProWellTech
While many industries are taking a major hit from the ongoing pandemic, the health technology market continues to grow. In fact, total healthcare innovation funding for the first half of 2020 reached $ 9.1 billion, up nearly 19% from the same period in 2019, according to the mid-year funding report from StartUp Health.
As the virus continues to pose new challenges for the industry, investors are rushing to pump money into startups dealing with healthcare subsectors ranging from telemedicine to patient financial commitment.
The inefficiencies and frustrations of the US health care system make it an attractive target for disruption-oriented VCs. But here’s the hard truth: Healthcare is unlike any other industry. It has a swamp of regulations that a “move fast and break things” startup can’t handle in the long run.
Healthcare is also a sensitive and personal issue. As such, patients are inherently reluctant to adapt to new technologies, even when they are dissatisfied with the status quo. As a result, it’s critical that the tech leaders of startups in this space understand how to wade through these unpredictable waters to thrive and deliver strong ROI for investors.
But here’s the hard truth: Healthcare is unlike any other industry. It has a swamp of regulations that a “move fast and break things” startup can’t handle in the long run.
Entering healthcare technology
VCs are seeing all the latest headlines on COVID-19 and are spying on a potential earning opportunity to invest capital in innovative startups. However, they must overcome barriers to entry when offering technology-centric and patient-centric solutions before they can compete with legacy players. As the saying goes, “Luck is what happens when preparation meets opportunity” and, within the healthcare startup space, COVID-19 represents an opportunity for those who were ready to offer a solution to the market before. that the situation became a crisis.
Therefore, VC and PE investors should focus on the problem the potential startup is trying to solve as recent times have rapidly reshaped the need for certain solutions. Are there other key players driving the market or is the startup a duplicate offering currently available? If the value proposition is unique, it might be interesting. If not, investors may want to think twice.