7 of Europe's top healthcare VCs share their best predictions for 2021, from human-computer interfaces like Elon Musk's Neuralink brain chip heating up, to prescribing technology that treat diseases
- We asked Europe-based VCs to predict the direction of healthcare for 2021.
- 2020 saw decades worth of digital transformation happen in the space of a few months, said Accel's Philippe Botteri.
- The pandemic-fueled drive towards telehealth is set to continue into 2021.
- Europe is a Femtech pioneer, and start-ups tackling women's health in 2021 are predicted to do well.
- Here's what 7 healthcare VCs expect to see in 2021.
- Visit Business Insider's homepage for more stories.
The coronavirus pandemic has caused a telemedicine explosion, in Europe and across the world.
It's driven by both consumers and providers, Pitchbook emerging technology analyst Kaia Colban told Business Insider.
People have been confined to their homes, and health care professionals have had to adapt to provide healthcare remotely. The pandemic has also shone light on life's fragility and the importance of high quality healthcare and resources, with 1.6 million deaths globally from COVID-19, the disease caused by the new coronavirus, according to the Johns Hopkins University.
This means people are more engaged with their health, seeking out biometric wearables and taking part in remote-patient monitoring, whereby health professionals can track patient's health data remotely.
Digital therapeutics are a technological advancement that can both monitor and treat certain health conditions. 2020 saw the US regulator, the Food and Drug Administration, approve additional prescribed digital therapeutics, including Pear Therapeutics' treatment for chronic insomnia. In 2021, Europe could follow suit.
And in 2020, Elon Musk unveiled a pig with a chip in its brain, arguing that similar technology could eventually be used to help cure neurological conditions. The technology, known as a human-computer interface, could be an area to watch in 2021.
Europe has always been very active in Femtech, and home to Stockholm-based Natural Cycles, the fertility-tracking app that pioneered digital contraception as the world's first certified non-hormonal contraception in Europe and the US. It has raised $37.5 million dollars since 2013, according to Crunchbase. Rapid growth in Femtech is expected to continue irrespective of the pandemic's impact because it's an underfunded market with a large need, Colban said.
Health trends in 2021 will be partly emerge from responding to challenges exposed COVID-19, like connecting fragmented healthcare systems worldwide. But also from breakthroughs in science.
Read on to see what some top Europe-based healthcare VCs expect to see in the new year.
Amadeus partner Amelia Armour is excited about the increase in the number of FemTech opportunities, a number of which are led by female CEOs.
Armour is most excited about a number of FemTech start-ups led by female CEOs, like Baby2Body, a digital health and wellbeing coaching app for women who are trying to conceive through to pregnancy. Baby2Body is in Amadeus' portfolio.
"They continue to increase their user base and have just released an Android version of their app, which will significantly grow their addressable market," Armour told Business Insider.
Women's health generally has been an underserved market, and Armour thinks it's positive that things are starting to shift.
"It's great that more startups are addressing this large opportunity," said Armour.
Accel partner Philippe Botteri expects patient data to come into the spotlight in 2021, after decades worth of digital transformation happened in the space of a few months in 2020.
2020 saw telemedicine facilitate remote medical consultations during lockdowns, and apps rolled out to track people infected with COVID-19, albeit sometimes imperfectly.
At the same time, Accel's Philippe Botteri said that people have started using technology more to engage with their health, for example using apps and wearables that provide them with greater insight into their general wellbeing, including for sleep patterns, diet, and heart rhythms.
"All of these [apps and wearables] help people make their own decision on lifestyle choices, illness prevention and medicines," said Botteri.
He said that next year will also bring further digitization of healthcare on all fronts, from telehealth to more connected health services.
Botteri thinks that this increased engagement with health technology overall means real-time insights into people's health.
"Data will come into the spotlight," Botteri told Business Insider.
Services will then become more personalized as people demand more control over their healthcare experiences, he said.
Balderton Capital general partner Suranga Chandratillake anticipates governments will be quicker to adopt digital tools to help make their healthcare systems run smoother.
The pandemic has exposed how differently health systems around the world respond to a pandemic, Balderton Capital general partner Suranga Chandratillake said.
"The lack of a shared infrastructure hurt the US. The regional variation of health provision in the UK affected its response," he said.
On the other hand, the federal provision allowed Germany to have a highly varied and therefore successful response, he added.
"What came out of the situation time and time again, though, was that where a system was digital and where it was truly widespread systems could be deployed quickly, change could happen rapidly and the virus' spread stopped," Chandratillake said. He provided South Korea's successful track and trace system as an example.
Chandratillake said that this has meant that return on investment on these systems has become very clear during 2020, and he expects governments across the world to invest in them in 2021.
"This will be a huge boom for both those already working in this space and a generation of new start-ups that will rise to meet the challenges," he said.
AlbionVC deputy managing partner Dr. Andrew Elder predicts a fundamental shift from "nice-to-have" to "must-have" for healthcare providers adopting technology.
Pre-pandemic, the rate of technology adoption by providers was a major reason holding the sector back.
However, 2020's COVID-19 outbreak has meant a significant amount of healthcare delivery has to be done remotely.
"Investors are feeling like this is a watershed moment," AlbionVC's Dr. Andrew Elder said. "The age of telehealth has finally arrived."
Before the pandemic, certain healthcare providers were on the fence about adopting healthcare technologies like video consultations. However, due to lockdowns, aspects of healthcare have had to be delivered remotely.
"So all of a sudden health providers are waking up to the fact that they should be using technology," explained Elder. There will be more remote monitoring and technology-enabled care, for example.
Elder predicts that the fundamental shift from "nice-to-have" to "must-have" is a really important one and it will change things. But it won't be across the board, and it won't be maintained quite as fast as it's going now.
"COVID-19 is definitely accelerating things, but I still don't think it's an overnight revolution. It's going to be an accelerated evolution," Elder said.
"Some may backtrack back towards business as usual, but I doubt that any will completely backtrack," he added.
Elder also predicts that more consumers in 2021 will pay for aspects of their health where the benefits are easily tangible.
"Things like improving eating (nutrition & diet), breathing (various respiratory conditions), sleeping (insomnia), and mental health are the areas of earliest adoption of digital tools by patients," he said.
"We're interested in all these areas," he added.
There has been a rapid adoption of healthcare technology in 2020, and LocalGlobe partner Julia Hawkins says it's here to stay.
During the COVID-19 pandemic, more patients have received care remotely, both primary care, and also for more complex diseases.
"I believe this reality is here to stay," LocalGlobe partner Julia Hawkins said.
AccuRx exemplifies this pandemic-fueled rapid growth. It's a company that provides communication tools for the healthcare system. Its flagship product, Chain SMS, is used by family doctor clinics to communicate with their patients via text.
Hawkins said that the number of family doctor clinics in the UK using Chain SMS grew from 40% to 99% during 2020.
Hawkins also expects to see wide scale use of accurate remote diagnostics without the need for labs, more digital therapeutics come to market for chronic conditions, and more complex illnesses treated at home.
"Patients in hospitals will be discharged earlier to continue their treatment at home, with continuous monitoring and AI used to identify health deterioration," she said.
"Overall, we will see better software to help orchestrate and support care teams and patients," Hawkins added.
Amadeus partner Pierre Socha believes the hottest area is novel human-computer interfaces.
Human-computer interfaces refer to the interaction between a human and a computer system. Amadeus partner Pierre Socha is interested in how the technology can be applied to healthcare, especially brain-computer interfaces and neural interfaces.
Brain-computer interfaces connect the brain to a computer, and are usually non-invasive wearable devices. Neural interfaces are devices that interact with the nervous system and can be placed externally, internally or both to record or stimulate neurological activity.
Elon Musk's Neuralink that aims to create a wireless interface between human brains and a computer system to allow people with neurological conditions to control their personal devices, like a mobile phone, with their mind, is an example.
"We have invested in the space for the better part of 20 years, from voice to vision-controlled computing, backing many startups that have become leaders in their industries," said Socha.
Apple acquired UK-based speech technology start-up VocalIQ in 2015, and Microsoft bought speech software developer Entropic in 1999. Other companies have gone public, like Swedish firm Tobii, now a leader in developing products for eye-tracking.
"We are more bullish than ever about the space, especially when it comes to applications in healthcare," Socha said.
"The hottest area right now is unquestionably around novel neural interfaces," he added.
Socha also anticipates breakthroughs in an emerging generation of quantum computers.
"Quantum biology is considered to be a new discipline", said Socha. It arises from research that suggests biological phenomena — for example the process that creates our sense of smell — may operate according to quantum mechanics, as well as classical physics, he explained.
Luminous VC co-founder and general partner Lomax Ward predicts that digital therapeutics will hit the market in Europe.
Prescribed digital therapeutics are prescription-only software that delivers evidence-based interventions to prevent, manage or treat a medical disorder or disease.
Luminous VC cofounder and general partner Lomax Ward said that 2020 saw the US Food and Drug Administration approve the first cohort of prescribed digital therapeutics, including: Pear Therapeutics for chronic insomnia, Akili for attention deficit hyperactivity disorder — ADHD — and Mahana Therapeutics for irritable bowel syndrome — IBS.
In 2021 he expects to see the first wave of these approvals in the European Union. Ward said that Germany is a particularly receptive market.
"The commercial rollout of these products in the US could also be an indicator for what may be coming down the line for Europe," he added.
Ward also predicts that 2021 will see virtual and augmented reality become more mainstream in treatment and care delivery.
"Payors and providers are waking up to the efficacy of these treatments, as well as the scale that they can deliver through a remote offering," said Ward. "And it keeps patients out of the hospital reducing both costs and stress," he added.
According to Ward, areas of particular impact will be mental health — for example, Oxford VR — and chronic pain — for example, Karuna Labs — because both are significant areas of healthcare spend.
Ward cited a report that says the market will jump from $2 billion in 2019 to $34 billion in 2027.
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