The coronavirus pandemic has catalyzed an explosive growth in investment in telemedicine – according to the CB Insights agency, in the first three months of 2020, the number of investment deals in the segment doubled from 51 to 103, and their total value increased by almost 300% ($1.548 bln against $418 mio). Below are a few more healthcare market niches that investors most count on, explained for Invest Foresight readers.
Artificial intelligence-based solutions appear the most promising medical projects for investment. According to CB Insights, in the first three months of 2020, investment in AI-enabled startups grew by 37% from the previous quarter. Overall, 80 deals have been made during that period (two more than a quarter earlier), the total investment approaching a billion dollars ($984 mio). However, the absolute record for the market was set in the third quarter of 2019, when total investment in 122 projects exceeded $1.6 bln.
The most notable projects predictably involve fighting infections. In February 2020, the Karius startup raised $165 mio to develop a solution for a rapid diagnosis of infections based on a liquid biopsy. With this method, one blood sampling is enough to check for as many as 1,400 pathogens, both viruses and bacteria.
Another promising market niche includes projects that develop technology solutions for psychological assistance. In the first quarter, companies raised a record of $576 mio in 44 deals in this segment, a 400% rise on the previous quarter, according to CB Insights.
One of the market leaders was the Lyra Health project developing a digital platform for psychiatric care, including via remote participation. In March 2020, the project received a new round of investment at $75 mio.
Investing in projects that use virtual reality to provide psychological assistance continues to be profitable. In February 2020, the Oxford VR project developing such solutions raised a round of $13 mio.
Stake on biotech
Investors have actively been buying into regenerative medicine, including solutions aimed at restoring damaged tissues caused by systemic diseases. In the first quarter of 2020, the financing of startups that specialize in regenerative medicine grew by over 70%, CB Insights reports.
One of the most notable deals included Lyell Immunopharma, engaged in developing cancer cell therapy (the startup received as much as $493 mio). The biotech startup ElevateBio develops new kinds of cell and gene therapy; it received $170 mio. ALX Oncology that is engaged in developing cancer immunotherapy received $105 mio.
Focus on women
The interest to medical femtech startups is still high. In the first quarter of 2020, the financing of such projects increased by almost 150% and reached $361 mio. However, the number of deals has not changed much. Several large deals in this area were related to remote services related to women’s health.
In January 2020, the Advantia women’s health service received $45 mio; the service helps making a doctor’s appointment and offers remote consultations by gynecologists, obstetricians, psychologists, as well as physical therapy. In February 2020, Maven Clinic digital health startup focused on women’s health and family planning raised $45 mio (among the investors are Hollywood stars Natalie Portman and Reese Witherspoon). Among its services are search for nurses, remote medical consultations and even surrogacy arrangements.
Investors also showed interest in solutions for pregnant women, such as prenatal diagnostics, as well as projects to support women with children, including psychology services.
By Olga Blinova