Leaders within the digital well being house advised MobiHealthNews their predictions about buyers’ priorities within the coming 12 months and what corporations might want to be careful for.
Following 2021’s expansive investments and the lower in funding in 2022, alongside vital layoffs, stakeholders count on funders to be extra selective in 2023 – scrutinizing corporations’ enterprise fashions and contemplating whether or not they’ve demonstrated they will enhance affected person outcomes.
Mark Luck Olson, CEO of RecoveryOne
“A tightening capital market will punish these healthcare disruptors that grew in any respect prices and failed to take care of fundamental monetary self-discipline. New enterprise funding will disproportionately go towards gamers which have established product-market match, compelling end result proof, sturdy EBITDA margins, and have grown sufficient to have line-of-sight to profitability.
“Employers and well being plans alike will rationalize their portfolio of digital well being options, pruning those who fail to generate adequate engagement, or who can solely be delivered as stand-alone, monolithic options.”
Ellen Rudy, vp of well being and social affect at Papa
“We’ll proceed to see extra of an urge for food for options that tackle nonclinical drivers in corresponding proportion. Information is required — and more and more obtainable — to indicate which fashions work. Nevertheless, as a result of payers are utilizing a number of distributors to deal with social determinants of well being, there is a want for trade alignment on validation and measurement. Attribution is difficult, however the digital well being startups that may show they’re driving improved outcomes and reducing the price of care would be the ones that proceed to see curiosity from buyers.”
Russell Glass, CEO of Headspace Well being
“Whereas I do not see the market rebounding in a single day (and even within the first few months of 2023), I do assume we’ll see a leveling out within the subsequent 12 months or so. Nevertheless, even with a extra secure market, I nonetheless see buyers paying shut consideration to corporations with extra complete, cost-effective options, [and] who can show each stable unit economics and their affect on affected person outcomes.”
Corey McCann, president and CEO of Pear Therapeutics
“I consider funding within the digital well being house will proceed to be tightly correlated to rates of interest. The basics for digital well being are sound, however all development equities are pressured as money flows into mounted earnings.”
Myoung Cha, chief technique officer and president of home-based care at Carbon Well being
“It will likely be a good time to begin an organization, and I count on earlier-stage funding to be fairly lively. Later-stage capital will proceed to be arduous to come back by and costly.”
Paymon Farazi, chief product officer at Signify Well being
“We’ll proceed to see an elevated emphasis on digital connectivity, notably strategies to assist major care suppliers prolong their attain past brick-and-mortar workplaces. We’ll see care turn into extra accessible and proactive as sufferers and suppliers embrace most of the applied sciences and providers driving higher preventive care. It will translate into extra funding for tech-enabled healthcare within the dwelling.
“We additionally will see extra providers shut gaps, whether or not associated to medicines, specialty care, social providers or different wants recognized through the care journey. Suppliers and payers will likely be investing in knowledge seize and workflow help to facilitate connections to result in efficient, constant care administration.
“On the similar time, we’ll begin to see the scaling of those strategies that actually work — in different phrases, produce sturdy medical outcomes — and the demise of those who do not.”
Ankit Gupta, founder and CEO of Bicycle Well being
“Speculative investing goes to tug again, and the businesses that get funded subsequent 12 months would be the ones that show a capability to draw new sufferers, get contracts with payers and different strategic companions, and generate constructive, evidence-based medical outcomes.
“Mergers and acquisitions may even be a much bigger issue within the digital well being panorama subsequent 12 months. In markets with appreciable competitors, count on corporations to merge to consolidate sources and improve market share. With an ever-competitive market, count on consolidation in a few of the crowded areas like digital therapeutics and telehealth.”
Florian Geier, vp and head of technique and pharma gross sales at Degree Ex
“Entry to funding will more than likely stay a problem in 2023, with layoffs at huge tech corporations only one indicator of what is likely to be coming. Nevertheless, if we’ve realized something from earlier financial slowdowns, healthcare, and consequently well being tech, usually has the sting over client, leisure, journey or different industries. The trade will likely be affected a lot much less.
“One benefit which will result’s the discovering and buying of expertise. Within the final decade, securing prime tech expertise has been troublesome as a result of healthcare startups and scale-ups competed with giant tech corporations that might pay exorbitant salaries for prime candidates. With strains on budgets and quite a lot of layoffs at huge corporations, the pool of expertise is broader, giving smaller corporations a greater probability to seek out and rent prime tech expertise. There’s a vital distinction in productiveness amongst prime tech expertise, which can give digital well being startups an edge amid potential consolidation throughout the trade and are available out stronger on the different finish.”