Digging into the data: Health tech companies in expansion mode have never been younger.
- The median age of a health tech company at the time of an expansion-stage deal was 7.4 years, per Deloitte's analysis of PitchBook's data.
On top of that, pre-money valuations for health tech companies have soared over the past two years:
- The upper quartile of these valuations jumped from $100 million in 2019 to $200 million in 2020 to $331.3 million in 2021, so far.
- And there were 21 public exits encompassing around $48.3 billion in value altogether—nearly four times last year’s $12.9 billion.
Key drivers: COVID-19 and the consumerization of healthcare.
Health tech companies got major cash injections to accelerate their virtual care products to help keep healthcare organizations up and running over the last year.
60% of US health organizations said additional investment into virtual health was a top priority, and 52% said having an enterprise-wide virtual health strategy was a top initiative to optimize adoption of virtual healthcare, per Deloitte’s 2021 survey of health leaders from 50 large US health systems.
Plus, incumbent health systems and payers have been bending to meet consumer needs for more convenient, affordable healthcare so disruptors like Oscar Health or Ro don’t eat their lunch:
52% of US adults want big, fundamental changes to the US healthcare system, per a recent Robert Wood Johnson Foundation consumer survey.
What’s in store for 2022? Tech like 5G and AI will likely come into greater focus to facilitate this vision for quicker, consumer-centric, personalized healthcare—and some companies are getting ahead on both fronts.
- For example, over three-quarters of health tech execs say they’re very or somewhat likely to implement 5G for telehealth (78%) and remote patient monitoring (75%) within 2 years, per a November 2020 Verizon survey.
Samsung recently piloted a 5G-powered smart hospital and debuted new AI integrations with its diagnostic imaging solutions.
- In another example, Best Buy acquired AI-powered remote patient monitoring platform Current Health to dig its heels deeper into consumer-focused digital healthcare.