Technology has penetrated numerous industries since time immemorial. Recently, the Health and Wellness industry has been disrupted with innovations driven by technology to make health services and tools more accessible and easier to use. This has brought in an epoch of consumer-focused healthcare innovations that are designed to provide wellness services with an emphasis on mobile use, compatibility with other health services, and sophisticated data analysis to provide personalized solutions.
Along with improving access to traditional care (e.g., Telehealth), these developments have brought in products such as health-monitoring tools, nutrition services, home exercise equipment, and subscription-based fitness services. With the coronavirus pandemic raging through the globe, we expect governments and health institutions to focus on development of technologies that help control such events and also prepare us against future pandemics. This has led to a substantial increase in investments in the Health and Wellness Tech industry.
In recent times, VC activity in this industry has spiked significantly as consumers have started accepting these new products and services. In the first half of 2020, VC funding for retail companies in the health & wellness tech industry totaled $3.8 billion across
In the second quarter of 2020, the Retail Health and Wellness Tech sector saw a total of 120 deals closed. VC funding for these deals totaled $1.9 billion. Amwell’s $194 million Series C funding and Insistro’s $143.2 million Series B funding were the largest deals during this quarter. 41.7% of the total number of deals were late-stage investments and these deals accounted for 78.6% of the total dollar value of the deals. These numbers are testament to this industry’s maturity.
Health and Wellness Tech Provides Better Exit Potential:
In 2019, there were 54 exits in the industry. In 2020, we have so far seen 15 exits in the first half of the year. While 2020 is not on par with the previous year in terms of exits, subdued VC exit activity has been seen across all sectors during this period. While there may be reduced exit activity in 2020 due to the unfavorable economic conditions, health and wellness tech companies that are able to provide services during the pandemic have a higher chance of landing a promising exit.
The retail side of the industry can be divided into five categories: Virtual Health, Mobile & Digital Health, Biometric Wearables & Devices, Dietary Supplements, and Personalized Medicine & Testing. Within the retail health and wellness tech industry, personalized medicine and virtual health startups have had larger deal sizes.
Bridge Point of View:
The demand for personalized health products and services along with an increase in chronic diseases has led to providers employing technology and analytics driven solutions in the Health & Wellness sector. We at Bridge Point Capital believe that with the awareness and understanding of the Retail Health and Wellness Tech industry can significantly influence healthcare innovation, delivery, and consumption across the globe.