MobiHealthNews spoke with a number of digital well being stakeholders about 2022’s funding atmosphere and the way it affected digital well being startups.
Investments in 2022 decreased drastically in comparison with the swells of economic capital raised in 2021, and that lack of funding compelled corporations to rethink their enterprise fashions.
Learn digital well being execs’ insights on how this 12 months’s decreased funding compelled layoffs, enterprise mannequin redesigns and an elevated deal with firm worth.
Dr. Jon Bloom, cofounder and CEO of Podimetrics
“The funding atmosphere for digital well being startups in 2022 was, effectively, tough. As an business, we went from being a beacon of revolutionary hope amid the pandemic to an unintentional harbinger of bloated valuations and a destroyer of shareholder worth.”
Dr. Jennifer Schneider, cofounder and CEO of Homeward
“The present market dynamics have compelled entrepreneurs to focus clearly on what really issues for the enterprise and the business extra broadly. Whereas the current widespread layoffs have actually been unlucky, it has additionally brought about a reset within the expertise market, offering alternatives for brand new companies to rent world-class expertise that won’t have been beforehand accessible.”
Dan Trigub, cofounder and CEO of MedArrive
“This 12 months’s funding atmosphere rapidly separated the ‘good’ from the ‘dangerous,’ that means companies constructed with poor unit economics on day one is not going to survive. It additionally compelled corporations to discover different funding options like enterprise debt or taking down rounds. Founders and government groups leaned into being extra diligent with capital and deliberate for the worst.”
Corey McCann, president and CEO of Pear Therapeutics
“We had been all compelled to adapt rapidly. Spend to develop was changed by develop to spend. We have all been compelled to deal with scaling our most core enterprise.”
Myoung Cha, chief technique officer and president of home-based care at Carbon Well being
“It has been brutal for mid-to-late-stage digital well being startups, and we have now seen numerous it play out with restructurings, layoffs, and even bankruptcies and shutdowns. There’s nonetheless much more to return in 2023 because the funding atmosphere is unlikely to enhance materially subsequent 12 months. “
Russell Glass, CEO of Headspace Well being
“The slowing of digital well being funding this 12 months accelerated merger and acquisition exercise, and this development will proceed in 2023. The psychological well being area, specifically, skilled an enormous inflow of entrepreneurs constructing digital psychological well being options amid the pandemic. It’s inspiring to see a lot consideration and energy being put into fixing the psychological well being disaster, however there may be now excess of the market can maintain. We’ll proceed to see these founders come collectively by means of consolidation to raise and broaden their choices to stay aggressive.”
Christopher Lis, managing director of worldwide healthcare intelligence at J.D. Energy
“The drop in funding appears to be extra in response to macroeconomic forces in the marketplace total as an alternative of disinterest in digital/digital well being ventures. Whereas there was a drop in total funding, the variety of offers being made solely fell by about 14%. Many buyers and organizations wish to make the healthcare area extra superior and environment friendly, and that may proceed within the years forward.”
Vijay Ravindran, CEO of Floreo
“This 12 months’s funding atmosphere is pushing startups to lift what they want, settle for valuations in decrease ranges and extra urgently take into consideration income streams forward of regulatory approvals and payments such because the prescription digital therapeutics laws on the Hill. Corporations must assume it is going to be more durable to lift in 2023 and that fundamentals round market match shall be extra extremely prized.”