Search

The Future Of The Healthcare Industry - July 2020

In this event, I wanted to understand how all healthcare startups differentiate by function, feature or use case. I attempted to map all software related healthcare startups - see the chart below. I then filtered these startups into 19 categories and labeled the top startups per category. I then looked through the top startups to understand how they innovate at a product level, which is the content of this report.


The chart below breaks down the funding, exits and closures per healthcare category. This data is seed-series G startups that raised within the last three years.



Quick facts about the data above:

  • Total Funding Column: 61% of funding flows to US based healthcare startups.

  • Total Number Column: 50% of the startups tracked are US based healthcare startups. The rest are any company outside of the US.

  • Average Funding: Startups in the US raise 28% more funding than the overall average. International startups raise 24% less than the overall average. This average removes 5% of the highest and lowest funding amounts to seclude outliers.

  • % Exit Column: 85% of exits have been from US based startups.

  • Watch Index: The number of top startups (based on team, product, funding) compared to the total number of startups within that subcategory. 58% of top startups within the watch index are US based startups.

  • Strategic Index: The number of startups that receive funding from strategic industry investors (CVC’s or top 10 institutional funds) compared to the total number of startups within that subcategory. 70% of the startups within the strategic index are US based startups.

  • Cash Multiple: This section highlights for every dollar an investor deploys into a startup, how much they should expect in return at the exit. This is based on the probability of exit for the subcategory, 7 year exit period with a 10% discount rate. This helps define the riskiness of subcategories and expectations for venture investors. The cash multiple for US startups is $31, whereas the cash multiple for international startups is $93.

  • Equity %: This section highlights the average equity investors can expect per $1M investment for each healthcare subcategory. This is based on the assumption 40% of equity ownership has been distributed by the average funding amount of startups.


 

The chart below breaks down how each healthcare category overlaps with other healthcare categories, by offering similar products or functionality. This helps investors/startups identify indirect competition and visualize future product roadmaps.



 

The chart below breaks down the primary target market of each healthcare subcategory. This information is based on what the top startups list on their websites in aggregate. This helps startups/investors understand which customer finds each subcategory valuable. This also helps startups/investors also visualize how other non-competing products can be an indirect competitor for customer attention.



 

The rest of the report breaks down the function, features and use cases of each healthcare category. To access the full report follow this link. Within each category I include what’s important in various sections to summarize important takeaways. This will provide a detailed review of what's trending across the various healthcare categories and the industry as a whole.


#venturecapital #vc #future #startups #healthcare #genetics #telemedicine