Updated: Mar 23
As traditional provider-based medicine is not satisfying the rapidly increasing demand of the population, the new era of consumer-focused digital healthcare products and services is emerging. Especially, the COVID-19 pandemic has become a catalyst for companies to develop innovative solutions, accelerating investment in the mobile & digital health industry.
Mobile & digital health companies are developing tools and apps that can assist consumers to monitor and improve personal health.
Generally, mobile & digital health products are sold directly to consumers. Revenue is generated through subscription (freemium and premium), ads and/or selling its user data. Some products are covered under insurance plans or paid for by employers as a workplace wellness benefit while others are self-pay.
The global mobile health market is estimated to grow to $173.8 billion by 2024, driven by a 38.5% CAGR from a market size of approximately $34.1 billion in 2019.
There were 29 VC raised $554 million in the first quarter of 2020 with 4 of them over $90 million. Among those, ZyHealth, as a diabetes management provider, pulled in an additional $143 million and was the largest deal (Figure 15.).
Enabling technologies such as health tools via smartphone apps can accelerate the adoption of solutions on-demand for consumers.
Increased monetization opportunities for digital content providers are emerging. For example, free workout video catalogs on YouTube can attract advertising dollars as consumers evolve to safe social distancing measures in response to Covid19 safety concerns.
De-stigmatization of mental illness can drive more willingness among consumers to seek treatment and technological solutions through remote patient monitoring with emphasis on patient medical compliance
The rise in dual-income households is stimulating the needs for fertility tracking applications.
Digital health apps can yield similar treatment effects where traditional care may be unavailable, increasing accessibility for low-income population.
The COVID-19 pandemic has driven a surge in demand for remote mental health applications.
There exists a huge market for over-the-counter family planning products, such as birth control medication
OTC sleeping pills possess life-threatening risks meaning that sleep medicine alternative such as sleep trackers are safer alternatives.
Flexible fitness applications provide non-committal fitness subscriptions and is a fast-developing trend that taps into the shifting preferences of consumers.
Corporate-sponsored health & wellness benefits offer lower prices per user and improved health outcomes and potentially lower medical costs for employers.
With the population rapidly aging, senior healthcare apps manifest compelling opportunities.
The increasing prevalence of noncommunicable diseases (NCDs), such as cancer, calls for a higher demand of digital monitors for NCDs.
As we mentioned before, an increasing number of people are aware that mobile & digital health can provide traditional therapeutics with better efficacy and reduce costs. Such change is not only supported by the development of technologies, but also by the shifting lifestyle due to the COVID-19 pandemic. We believe the following applications will be widely used in the near future.
Health monitoring platforms that will connect doctors and patients in a closer way and enable patients to track their health concerns or doctors' advice in a more effective way.
Digital therapeutics will be extremely beneficial in certain fields such as Autism and other disorders related to cognitive dysfunction.
Virtual fitness club will also attract people's attention due to the rapidly emerging "stay at home" lifestyle.
With the above opportunities and concerns in mind, we summarize the immediate and long-term outlook for the industry.
The strive for personalized and convenient services
Many companies currently utilize data-collection technologies such as genetic testing to customize health and fitness products, so that they can be tailored to the unique requirements of each customer. Those personalized products have proven to be a more effective solution when compared to their traditional population-focused counterparts.
Data sharing/social connectivity without compromising privacy
COVID-19 has unquestionably proven that widespread data availability and sharing is important for tracking and monitoring public health. It is our expectation that companies will be able to utilize data sharing as a method to accelerate innovation while also protecting the privacy of consumers in the future.
Virtual reality gamification
Due to the COVID-19 pandemic, many public fitness gyms have closed, thus inducing many fitness enthusiasts to exercise at home. By incorporating Virtual Reality (VR) technology within the health and fitness industry, we could potentially see innovative products creating “virtual exercise spaces” which could allow customers to meet their fitness goals anywhere and anytime.
Growing popularity of fertility-tracking digital technology
With the current birth control pills and products being side-effects prone, fertility-tracking digital technology do not possess any side effects, meaning that they may be a safer alternative to the current options on the market.
Corporate sales channels
Corporate distribution channels have proven to be effective at reaching consumers in a more direct way. With many companies’ perquisites and other partnership opportunities available, enhanced distribution will not only increase but also induce more loyalty within customers through both better pricing and convenience.
AI has the potential to revolutionize healthcare in many areas. Currently, the immediate outlook for AI integration is the development of chat bots, which basically act as robotic healthcare practitioners, doctors, nutritionists, to closely monitor your health on demand.
The New Future
Given the current concerns within the mobile and digital health, the investment within this sector is not one without risk. However, we believe that the promising outlook of the industry outweighs these concerns. We here at Bridge Point Capital are committed to recognizing and seizing investment opportunities in this fast-growing field, while minimizing the investment risks for our investors. Given our current experience, consisting of creative value-creation strategies and with our long-term focus in the full private equity investment process spanning from deal-sourcing to exit, we believe that we will be able to gain profitable investment opportunities for our investors and partners.