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Exploring The 2020 Digital Health Sector

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H1 Deep Dive on the Global Digital Health Sector Landscape

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Exploring The 2020 Digital Health Sector

  1. 1. Sector Overview: Digital Health From the eyes of an international investor H1 2020
  2. 2. White Star CapitalWhite Star Capital Contents Section 1 Digital Health Ecosystem: An Overview Section 2 Sector Focus Virtual Care Mobile Health Software Communication Section 3 Geographic Outlook North America Europe Asia Section 4 Partnering with White Star Capital 2 04 18 35 39
  3. 3. Digital Health For Everyone • Global annual healthcare expenditure is close to $9tn (10.2% of the world’s GDP). The US spends about $3.5tn, representing well over one third of the global spend • Addressing the above issue, both patients and providers started leaning into digital health solutions. Globally, hospitals keep adopting more medical software, such as EMRs or different decision/risk assessment tools, and patients are taking to out-of- hospital care services such as virtual care or digital therapeutics • Unsurprisingly, annual global VC funding into digital health grew nearly 16x since 2011 to $42.5bn in 2019 • In 2019, funding in the digital health space has been mostly concentrated in Asia with around $22.2bn in total funding. North America (specifically the US and Canada) and Europe follow with $9.6bn and $9.3bn invested into digital health companies respectively (see page 11) • US and Canada combined make up about 4.6% of the world’s population and yet their startups attract, on average, 1 in every 5 dollars of the global digital health VC funding • At White Star Capital, we are particularly interested in businesses democratizing access to and affordability of healthcare in a world where the cost of healthcare is rising disproportionately faster than the average income • Another area that we are interested in is the application of AI/ML in the digital health sector: Technologies that allow for higher efficiency in managing health professional workflows and complex decision making will become increasingly crucial to delivering digital health profitably at scale • Many healthcare companies and practices are collecting large amounts of patient data, but this data is siloed and hard to access. For this reason, we are interested in companies solving for medical data normalization, integration, and secure data search and retrieval We define Digital Health as technology-enabled healthcare products and services enabling higher quality care or convenience to patients. Our scope excludes most Medtech and Biotech products which require FDA approval. 17.1% 11.3% 11.2% 10.6% 10.9% 9.9% 9.6% 7.6% 5.2% 4.4% US France Germany Canada Japan EU UK South Korea China Singapore Health Expenditure (% GDP) in 2017 – World Bank White Star Capital 3
  4. 4. White Star Capital 1Digital Health Ecosystem: An Overview 4
  5. 5. White Star Capital 2019/2020 News Highlights 5 $9.8bn Of VC capital invested into Digital Health globally in Q1 2020. This is close to 12% above Q1 20193 $110bn+ Digital Health VC funding over the last 3 years3 21% Share of VC funding over the last 3 years globally3 31 VC-backed Digital Health unicorns globally1 16% Share of seed funding invested in Digital Health over the last 3 years globally3 45 Digital Health IPOs over the last 10 years1 10 Mega rounds in early 20202 125% ▲ Teladoc, a US telehealth provider, more than doubled in valuation since the beginning of 2020* * As of April 20th 2020 1) CBInsights 2) Rounds >$100m as of April 15th 2020 3) Pitchbook
  6. 6. 1) Pitchbook. Telemedicine startups see sharp demand driven by coronavirus fears 2) Barron’s. Teladoc Stock Surges on Huge Growth in Virtual Doctor Visits 3) WSJ. Hospitals Tap AI to Help Manage Coronavirus Outbreak 4) Mercom Capital Group. Q1 2020 Digital Health (Healthcare It) Funding And M&A Report White Star Capital 6 2020: Seminal Year For Digital Health Strained healthcare infrastructure and urgency of rapid response to COVID-19 pandemic is pushing unprecedented market adoption of digital health solutions that replace archaic, status-quo tools for good, with regulators easing restrictions • Demand for remote mental therapy has spiked. Talkspace, the US-based text and video chat therapy service has seen a 65% increase in customers • Virtual Care companies are experiencing a surge in traffic amid COVID-19. Amwell’s virtual clinic usage has surged 40% above normal1 • Teladoc has doubled in valuation, seeing a surge in demand for its services with total visits 70% higher than last year (2019) 2 • Hospitals adopt technology to manage the outbreak. For example, Sheba Medical Center in Israel has equipped hospital units treating COVID-19 patients with AI-powered monitoring equipment, and Tampa General Hospital in Florida installed a new AI system designed to detect feverish visitors with a facial scan 3 • VC funding for telemedicine companies shot up to $788m in Q1 2020, more than triple the amount they raised in the same period the previous year4 Key regulatory changes in the US, Canada, and Europe • In the US, CMS* added telehealth services to Medicare’s coverage regardless of patient’s and provider’s location and communication media • The HHS** in the US waived restrictions on non-HIPAA compliant telehealth remote communications amid COVID-19 • Health Canada, Canada’s medical device market regulator, started accepting some clinical-trial-related information from sponsors via electronic submissions • In the UK, NHS made a push for GPs to start conducting as many remote consultations as possible, replacing patient visits with phone, video, online or text contact • The UK, France and Germany authorized priority and certain flexibilities for clinical trials to support research of treatments for COVID-19 2020 Regulatory Changes In a matter of days, a decade-worth of regulatory changes are likely to become a permanent reality in Europe and North America: *Centers for Medicare and Medicaid Services **US Department of Health & Human Services
  7. 7. $836 $4,196 $4,652 $4,862 $4,911 $5,711 $10,210 China United Kingdom Japan Canada France Germany United States Healthcare spending Globally, United States have by far the highest spending on healthcare. This is above all due to higher drug prices (compared to RoW), rising provider wages, and high proportion of admin costs The United States continue to spend the most on healthcare per capita yet have similar quality of care and life expectancy as other OECD countries Average healthcare spending per capita The US is overspending the world on healthcare, however performance of the health system is much better across other comparable countries globally Source: Peterson-KFF Health System Tracker Healthcare Quality and Access (HAQ) Index Rating The HAQ Index is scaled from 0 to 100: lower scores indicate higher mortality rates for causes preventable by timely and effective care, thus lower quality of and access to health care. The Comparable Country Average is 93.7 7 $176bn $275bn $329bn $472bn $591bn $1,153bn $3,325bn Canada United Kingdom France Germany Japan China United States Government/compulsory expenditure Private/voluntary expenditure White Star Capital 96.1 95.5 94.1 92 91.7 90.5 88.7 Netherlands Sweden Japan Germany France United Kingdom United States
  8. 8. Trends in Healthcare Many trends shape the current state of the global healthcare system, including increased digitization, consumerization and value-based care 8White Star Capital 2) Consumerization of healthcare • Consumers are more aware of their health and are consciously making more multivariate, value-oriented decisions around their health • Increasing healthcare costs are putting upward pressure on premiums and out-of-pocket costs for patients. More consumers are purchasing High-Deductible Health Plans (HDHP) Trend toward high deductible health plans (as a percentage of total) 13% 16% 23% 24% 21% 24% 24% 30% 30% 29% 32% 6% 12% 15% 17% 19% 19% 24% 26% 23% 29% 25% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 All Small Firms All Large Firms 3) Value-based care • The value-based reimbursement model introduced in 2008 focuses on care outcomes and quality. Healthcare delivery system is migrating from a "one and done" fee-for-service model to a value-based care system Better Health Lower Costs Data Interoperability Better Patient Experience Better Care Coordination Value- Based Care Benefits of Value-Based Care 1) Increasing digitization across the healthcare value chain • Adoption of Electronic Medical Records (EMR) globally has led to increased opportunity and demand for integration across the digital value chain • Healthcare organizations need to be better connected and system interoperability will continue to be a focus for the next few years Payers Hospitals & Health Systems Pharmacy Home Care Customer Digital Value Chain Longitudinal Health Record Physician Office Long–term care Connected Data Source: KFF, 2019 Employer Health Benefits Survey
  9. 9. Key considerations for insurers: • Increased importance of being a trusted partner and advisor to patients by guiding them to the right care • Focus on improving critical customer-facing functions throughout the enrollment experience • Focus on friction-free member experience with a human-centric design that engages customers and incentivizes them to use the payer’s portal and apps • Focus on administrative cost savings (15 to 40%) in effort-intensive areas by leveraging automation across many different workflows Administrative Cost Savings Medical Cost Savings Revenue Growth 35-40 • Self-service tools (member/provider) • Paperless communication • Sales support and process automation • Increased sales conversion by improved customer-to-sales-representative matching 35-40 • Analytics-driven provider pricing • Provider contract standardization • Guided care/pharmacy selection • Virtual care offering for less urgent health needs 20-30 • Decision support tools for customer conversions • Unified CRM solutions enabling better lead management and cross-sell/up-sell Total Cost Impact, % Examples Health Insurers Lean Into Tech White Star Capital Source: McKinsey. Digital is reshaping US health insurance—winners are moving fast, January 2019 9 Insurance companies are partnering or acquiring digital health companies. The strategy is to capture new value pools and defend their position against external, primarily tech-driven disruption
  10. 10. Major insurance companies across the world partner with digital players to strengthen their product offering BaoViet, Vietnam’s largest health insurance provider, partnered with MyDoc, a leading Singapore-based digitally integrated clinic service. BaoViet’s policyholders can access free value-added digital concierge and healthcare services on their mobile phone, including doctor consultations and electronic prescriptions. Cigna, a US-based worldwide insurance provider, acquired Brighter, a healthcare software company helping users to find and compare care providers. Cigna is using the technology and team to develop future member-facing mobile and desktop tools, as well as continuing to run Brighter for its existing customers. Sun Life Financial, a leading life and health insurance provider based in Toronto, partnered with Canada’s leading virtual care provider, Dialogue. Sun Life’s employees and policy holders can access Dialogue’s virtual clinic to connect directly with a health care professional. Barmer, Germany’s largest health insurer, partnered with Kaia, a digital therapeutics company providing interactive therapy for back pain and chronic obstructive pulmonary disease. Barmer’s policyholders can access the app for free. White Star Capital 10 AXA, a Paris-based insurance company, acquired Maestro Health for $155m. Maestro Health is a software company that makes it easier for employees to buy and use their health insurance and other benefits. AXA said the acquisition is part of a broader initiative to invest in innovation and expand its presence in the US market.
  11. 11. 921 1,278 1,936 2,774 4,200 5,087 5,869 6,814 7,064 1,231 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* North America Europe Asia Rest of World $2.7bn $3.3bn $4.3bn $6.0bn $14.6bn $21.9bn $23.8bn $44.3bn $42.5bn $10.7bn 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* North America Europe Asia Rest of World Digital Health Funding Has Grown North America and Asia have led the global funding from a deal value perspective, with mega rounds into startups like Iora Health, Clover, Ping An Healthcare and JD Health driving the overall activity On the other hand, deal volume remains comparable across the three major regions that have driven funding activity over the past 10 years Deal value Deal volume Source: Pitchbook * As of April 2020 11 From a blip on the radar to a massive sector that attracts over 21% of all VC funding White Star Capital
  12. 12. US Canada UK Germany France Scandinavia China SEA Seed share of deals 52% 73% 59% 48% 31% 76% 20% 52% 14% 9% (6)% (8)% (24)% 2% (12)% (5)% Series A share of deals 28% 13% 29% 35% 38% 11% 45% 22% (4)% (34)% 11% 4% 16% (24)% 11% (2)% Series B share of deals 10% 7% 10% 9% 22% 8% 20% 16% (15)% (7)% 23% 27% 40% 23% (11)% (12)% Series C share of deals 5% 7% 2% 4% 6% 5% 9% 10% (28)% NA (11)% 18% 6% 41% (9)% NA Series D share of deals 3% 0% 0% 4% 2% 0% 6% 0% 9% NA (100)% NA (8)% NA 104% NA Series E+ share of deals 1% 0% 1% 0% 2% 0% 1% 0% (26)% NA (11)% (100)% NA NA 18% NA Share of deal volume by deal stage (2019) Source: Pitchbook US and Canada are experiencing an acceleration in seed funding… The Digital Health ecosystem is maturing as seed funding begins to decline in the UK, Germany and France, with US and Canada likely to follow suit 12White Star Capital +[xx]% Growth in share of deals from 17-19
  13. 13. 0 10 20 30 40 Seed Series A Series B 2017 2018 2019 2020 Q1 0 5 10 15 20 25 Seed Series A Series B 2017 2018 2019 2020 Q1 0 10 20 30 40 Seed Series A Series B 2017 2018 2019 2020 Q1 0 10 20 30 40 Seed Series A Series B 2017 2018 2019 2020 Q1 0 10 20 30 40 Seed Series A Series B 2017 2018 2019 2020 Q1 0 5 10 15 20 Seed Series A Series B 2017 2018 2019 2020 Q1 0 10 20 30 40 Seed Series A Series B 2017 2018 2019 2020 Q1 USA UK Germany France Scandinavia Canada China SEA Median invested capital by deal stage (in $m) Source: Pitchbook … and round sizes are increasing on average across the spectrum 13 0 5 10 15 20 25 Seed Series A Series B 2017 2018 2019 2020 Q1 White Star Capital Series A deals are generally between $5m to $10m across US and Europe, while in China the average Series A is larger (between $10m to $15m)
  14. 14. Series B deals are experiencing the largest increase in valuations Source: Pitchbook - Asia data taken from 2018 due to a lack of 2019 announced valuation data - Note: Please note Pitchbook valuation data has limitations and only considers rounds that have officially announced valuations. For this reason, Africa and South America have been excluded Median pre-money valuation and growth since 2014 $6.5m $4.3m $3.5m $15.0m $32.5m $8.7m $55.0m $115.3m $67.3m Seed Series A Series B1 North America Asia Europe +5.4% +59.7% +16.6% +12.6% (18.2)% 11.8% +29.2% +30.9% 30.3% Iora Health Series F: $126m (2020) USA Concerto Health AI Series B: $150m (2020) USA Dialogue Series B: $30m (2019) Canada Hinge Health Series C: $90m (2020) USA Verana Health Series C: $100m (2020) USA Lyra Health Series C: $75m (2020) USA Clover Series E: $500m (2019) USA Babylon Health Series C: $550m (2019) UK Doctolib Series E: $162m (2019) France ZnanyLekarz Series E: $90m (2019) Poland Halodoc Series B: $65m (2019) Indonesia KRY Series C: $152m (2020) Sweden Selected outsized funding rounds 2019 - 2020 Funding round sizes have increased significantly across major regions and funding stages. Asia is taking the lead for the largest valuations for Series A and B stage companies 14White Star Capital
  15. 15. $56m Later-Stage (2019) $19m Series B (2020) $21m Series B (2020) $73m Series D (2019) $126m Series F (2020) $33m Series C (2019) $69m Later-Stage (2020) $30m Series B (2019) $45m Series C (2020) $85m Series B1 (2019) $200m Series C (2019) $500m Series E (2019) $305m Corporate Rd. (2019) $375m Later-Stage (2018) Size of most recent capital raise* (2018-2020) $500m $100m $50m $20m Source: Pitchbook (HealthTech in United States/Canada); *Note: Only the latest VC-backed round shown for each company Significant Rounds by Geography $550m Series C (2019) $200m+ Series C (2020) $50m Series C (2019) $26m Series B (2019) $170m Series E (2019) $155m Series C (2020) $90m Series E (2019) $49m Series C (2018) $42m Series B (2019) $113m Series D (2020) $65m Series B (2019) $70m Series C (2020) $72m Later-Stage (2020) $46m Series B (2019) $1bn Series A (2019) $250m Later-Stage (2019) $200m Later-Stage (2019) $150m Series C (2019) $141m Series C (2019) $45m Series D (2019) (Yaoyanshe) $43m Series C (2019) $36m Series C (2019) $70m Series D (2019) $300m $21.5m Series A (2019) $15m Series A (2019) $63m Series B (2019) $65m Series E (2019) $56m Series B + B1 (2019-20) $210m Series E (2019) 175m Series B (2019) $25m Series A (2019) $6m Seed (2019) $11.7m Series A (2019) $17m Series A (2019) $8.5m Series A (2019) $20m Series C (2019) $35m Later-Stage (2020) $15.4m Later-Stage (2020) $30m Later-Stage (2020) $10.2m Series A (2019) $66.4m Later-Stage (2019) $1000m 15White Star Capital China and the US are home to some of the most funded Digital Health companies $41m Early-stage (2018) $100m Series C (2019) $115m Later-Stage (2018) $9.3m Series A (2019) $47m Later-Stage (2018) $9.8m Seed (2018) $52m Series C (2019) $34m Series B (2019) $30m Series B (2019) $635m Series D (2019) $5m Series A (2020) $150m Series B (2020) $27m Series B (2020)
  16. 16. Select VC-Backed Exits Sources: Pitchbook analysis *As of April 2020 Date Company Valuation May 2018 $7.4bn Jul 2019 $2.5bn Jan 2020 $1.7bn Jun 2016 $1.7bn Dec 2019 $1.6bn Jul 2019 $1.0bn Jul 2019 $912m Jan 2020 $622m Selected VC-backed IPO exits 16 5,204 VC-Backed M&A 907 VC-Backed IPOs VC-backed exits 169 163 194 227 264 225 230 206 223 46 52 46 81 161 140 87 85 116 103 31 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 M&A IPO Date Target Acquirer Valuation Oct 2019 $5.8bn Feb 2019 $3.4bn Nov 2019 $2.1bn Apr 2018 $1.9bn Aug 2018 $800m Sep 2018 $753m Feb 2019 $600m May 2019 $515m May 2018 $352m Jan 2019 $242m Jun 2019 N/A Selected VC-backed M&A exits Global Digital Health Exits, 2010-2020* White Star Capital M&As are dominating the exit activity, with US and Asia leading the way
  17. 17. $83 bn+ Value Created by Digital Health Unicorns globally* 52% Of Digital Health Unicorns come from North America Select Global Digital Health Unicorns (as of April 2020) Sources: CB Insights State of HealthCare Report, Pitchbook Analysis *As of April 2020 North America 17 $5.0bn $3.2bn $1.9bn $3.0bn $1.8bn $1.5bn $1.5bn $1.2bn $1.0bn $1.0bn $5.5bn $3.2bn $2.8bn $2.5bn $1.3bn $1.0bn+ $1.1bn Asia 9 $5.5bn $5.0bn $2.4bn $1.6bn $1.0bn $1.0bn $1.0bn $1.0bn $1.0bn Europe 5 $2.0bn $1.2bn$3.5bn $1.0bn$2.1bn 17White Star Capital US continues to houses the largest number of the world’s Digital Health unicorns *currently all in China
  18. 18. White Star Capital Sector Focus 2 18
  19. 19. White Star Capital Virtual Care 19
  20. 20. 131 67 171 177 979 665 1,266 1,504 3,462 533 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* East Asia (excl. China) Europe North America Deal Count 33 5126 43 63 103 133 181 249 293 Virtual health funding 2011 - 2020* (in $m) Virtual Health – Overview 20 The global Virtual Care market was $5.6bn in 2019 and various experts expect the market to grow at a 24-36% CAGR between 2019 and 20251. With the increase in adoption of virtual health technologies, both primary and specialty care can treat a broader population at a lower cost while improving on patient experience. Due to the many benefits of virtual health, we believe this will be a high-growth segment over the coming years. Primary Care • Nearly 27% of US adults, and as high as 45%, of adults under the age of 39, say they do not have a primary care physician (PCP)2. The average wait time to see a PCP in the US is one month due to the current shortage • The UK has the second lowest number of doctors in leading European nations relative to its population with 2.8 doctors per 1,000 people compared to an average of 3.5 doctors across the OECD3 • In Canada, only 43% of patients can see a provider within a day when in need of care.4 This is only slightly better in Germany and France, with 53% and 56% of patients respectively being able to see a provider within a day5 Specialty Care • One in three patients are sent to a specialist each year in the United States • There are 263 specialists per 100,000 urban residents, but only 30 specialists per 100,000 rural residents4. Virtual specialized care allows for broader reach with a faster wait time compared to traditional practices Pitchbook Q4 Healthcare Report. * As of April 2020 1) Globalnewswire - Virtual Primary Care Platform to Improve Patient Access 2) The Guardian - UK's number of doctors per capita is one of lowest in Europe 3) AAMC - Health Disparities affect millions in rural US communities 4) Canadian Foundation for Healthcare Improvement – Primary Care 5) Center for American Progress - The Truth on Wait Times in Universal Coverage Systems Virtual Care businesses focus on digital distribution of health services. Companies in this sector provide access to general providers as well as specialized providers White Star Capital
  21. 21. Virtual Primary Care Patients receive punctual and / or continued virtual care from primary care physicians, nurses, and other healthcare professionals. Some of the functionalities and benefits are: Key Sub-Sectors • Instant access to health care professionals • Easy to order labs for patients and providers • Automated results routed to patient portals • Early diagnosis and health monitoring • Wellness screenings and check-ups • Ongoing patient-doctor relationship Virtual Specialty Care Specialty care offers patients more advanced care from chronic disease management to mental health. Some of the functionalities and benefits are: Some key subsectors of virtual health are virtual primary care, virtual specialty care, and remote patient monitoring (RPM) 21 • Instant access to virtual consultations with specialty providers • Use of web-based programs or shared electronic medical records help tracking progress and improve quality of care • Helping patients in less densely populated areas to access speciality care services • Increased access to specialized care (e.g. speech and mental therapy) for children White Star Capital Remote patient monitoring (RPM) Allows physicians to monitor patients outside of the conventional clinic setting and track symptom progress on an ongoing basis • Reduce hospital readmission penalties • Leverages technology to make patients feel comfortable managing their own health • Increases the prospect of patient engagement • Improve the quality of care • Improved support, education and feedback
  22. 22. Trends Challenges Key Trends and Challenges 22 We expect digital-native generations entering their 30s and 40s and well as the recent COVID-19 pandemic to provide some tailwind to virtual care adoption. Behavioral Shift We see an increasing number of virtual care businesses focusing on a specific medical conditions. This addresses the issue of low concentration and access to specialists outside of urban areas. Specialization We see a radical shift from reactive care i.e. responding to an existing problem to proactive care i.e. continuous care focusing on prevention and health maintenance. Telehealth is a great medium for the latter. Reactive to Proactive More virtual care companies are adding features to complement their core offering. For example, Parsley Health offers symptom logging, 24/7 texting, partner perks, and a suite of supplements. Service Bundles Similarly to mobile health, virtual care is a manifest of the push to democratize access to health services from anywhere. Democratizing Health Many niche virtual care companies are being approached by larger care providers looking to expand into specialty services. We expect to see an increase in consolidation in the next few years. Consolidation Lack of reimbursement, complex licensing requirements, and the ingrained ways of both consuming and providing healthcare have contributed to sluggish adoption of virtual care. Slow Adoption Physicians and patients are concerned about data security and the access of their health data. Security Concerns Telehealth has limitations as to what issues it can truly help resolve. Patients with more complex and serious conditions will still need to visit a doctor in person to get an appropriate treatment. Physical Limitations Virtual care regulations vary from state to state and can be hard to decipher. High- deductible policies and lack of reimbursement options make the cost of virtual care prohibitive to many patients. Policies and Regulation Due to the virtual limitations, there are possibilities of misdiagnosis. Medical Errors Virtual care businesses employ expensive medical providers on full-time basis. It is a costly model that requires careful tracking of provider time utilization to maximize margins. Provider Utilization White Star Capital The COVID-19 pandemic has provided accelerated desire for digital access and tailwinds for Virtual Health adoption
  23. 23. White Star Capital Mobile Health 23
  24. 24. 448 432 405 796 1,500 1,488 2,410 2,884 4,274 1,158 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* East Asia (excl. China) Europe North America Mobile and wearable technology impacts all digital health companies aiming to personalize health monitoring and make health improvement convenient for consumers through both hardware and software products • The global environment for mobile health disruption is prime. Private healthcare is becoming untenable for consumers, with costs ever-rising – the US alone has reached $11,000+ per capita in 2019. Meanwhile, public healthcare is driving toward personalized, digital medicine: 74% of European states already have national-level policies toward integrating these approaches into universal healthcare plans1. • At the same time, consumers in public, private and hybrid systems are becoming sicker with lifestyle-related illnesses: over 21% of global deaths (and growing) are due to lifestyle-related chronic diseases. The incidence of diabetes mellitus alone is expected to increase by 48% worldwide through 20452. • Consumers are seeking cheap, convenient and digital alternatives to the traditional healthcare system, and are turning to mobile health services that either parallel primary care or allow users to improve other health factors that contribute to chronic ailments (sleep, diet, fitness). • Mobile Health was a $24bn global market in 2018, and is expected to grow explosively at 26.1% CAGR to reach $152bn by 20263. This market is propelled by companies in North America, where over 80% of VC funding occurs. • The trends we’re most keen on include: 1) remote patient monitoring (especially within the $1.4tn global geriatric care market), 2) dropping the “break-fix” healthcare model for consumer-led preventative care, and 3) hyper-personalization of diagnostics as consumers demand increased access to and transparency surrounding health services. Pitchbook Q4 Healthcare Report - * As of April 2020 1) European Journal of Public Health 2) Deloitte 2020 Global Healthcare Outlook 3) Pitchbook Q4 Healthcare Report 93 97114 172 202 272 318 382 413 470 Mobile Health – Overview 24 Mobile Health funding 2011-2020* (in $m) Deal Count White Star Capital
  25. 25. Key Sub-sectors Wearable Hardware & The “Quantified Self” Personal Health Tracking Digital Therapies Integrating biometric technology into consumer wearable devices that can continuously monitor health data, like heart rate, blood sugar, and more. • Biometric monitoring • Fitness assessment • Stress analysis • Sleep monitoring • At-home clinical devices Software tools and platforms that help consumers self-monitor health concerns, and empower them to contribute to their overall health. • Nutritional support • Virtual fitness and wellness • Mental health support • Diet and nutrition analysis • Behavioral adjustment Platforms that help healthcare providers and their patients manage healthcare needs together. • Mobile primary care • Cognitive and psychological therapies • Prescription digital therapeutics • VR healthcare • Specialized digital consultation Some of the key subsectors in healthcare Mobile Health are wearables and the “Quantified Self”, decision tools and predictive analytics, and medical workflow businesses 25White Star Capital
  26. 26. Challenges Key Trends and Challenges 26 Consumers increasingly want access to care when, where and how best it suits them – as in other sectors, at the tips of their fingers. Convenience The aggregation and analysis of patient data from wearable devices and consumer services provides opportunities for healthcare-focused firm to monetize information. Data Monetization Enabled by technologies that allow earlier diagnosis, care models are evolving to focus more on prevention and wellbeing, rather than treatment. Preventative Care Via hardware sensors in concert with digital platforms, companies are partnering with healthcare providers to create unified care experiences for patients, in the office and at home. Interconnectivity Noncommunicable diseases, such as cancer and diabetes, are increasingly prevalent, and their primary risk factors (drug use, obesity, poor diet) can be addressed via digital monitoring. Monitoring NCDs Significant portions of the global population have limited access to healthcare– this is an opportunity for cheap, mobile and digital services to close gaps where healthcare infrastructure is weak. Expanding Access As value-based care brings more stakeholders together to improve patient outcomes. However, healthcare providers assume new risks in potentially unprofitable partnerships. Value-Based Partnership Legacy healthcare networks must improve the exchange of member, payer, patient and provider data on a near real- time basis to meet modern care needs. Data Integration Great hurdles remain in seamlessly synchronizing mobile devices with static in- clinic devices, such as reconciling data formats and operating environments. Reliability The security of medical records and healthcare provider-data is a key area of regulatory focus– penalties happen to partner-companies who lack the necessary protections. HIPPA Compliance Stolen electronic health records can be sold for hundreds to thousands of dollars, and data-theft is increasingly common. Data Leaks Fraudulent Science It is not always clear whether a Mobile Health startup can do what it claims, even with FDA/FTC oversight – avoiding Theranos-like incidents is paramount. White Star Capital The desire for convenience, preventative care, as well as continuous disease monitoring has provided significant tailwinds to the growth of Mobile Health startups Trends
  27. 27. White Star Capital Software 27
  28. 28. 48 373 229 253 702 689 1,330 1,552 2,365 840 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* East Asia (excl. China) Europe North America • Healthcare spending is rising across the spectrum with the US at the forefront. The US currently spends almost $11,000 per capita on healthcare costs per year. • However, the scale and complexity of demand for health care is increasing due to the growing and aging population and greater expectations for personalized and convenient services. And so the question is; how do we lower costs, while not compromising on quality of care? • About 30% of the US healthcare expenditure is a result of administration.1 This is where healthcare software, allowing for streamlined monitoring and management of healthcare organization and patient data, becomes crucial. • The global healthcare software industry is estimated to reach $30bn by 2023, growing at 7.4% CAGR. Out of that around 55% is in the Americas (predominantly North America) and over 75% in Americas and Europe combined.2 • The US and Canada are particularly interesting – majority of healthcare services are provided by private enterprises in both countries, a fact that makes healthcare software particularly attractive.3 • Some of the most interesting trends we see pertain to 1) making current data system more interoperable (which is a pain point for 62% of physicians 4), 2) the prevalence of predictive analytics and AI application to automate tasks and/or improve treatment accuracy and outcomes, and 3) the complexities of Revenue Cycle Management (RCM). Healthcare software encompasses many critical work streams such as patient data management, compliance, billing, HR, treatment and workflow optimization Healthcare Software funding 2011 - 2020* (in $m) Software – Overview 28 Deal Count 38 9952 112 143 204 265 347 407 422 Pitchbook Q4 Healthcare Report - * As of April 2020 1) The New York Times – The Astonishingly High Administrative Costs of U.S. Health Care 2) In-Depth Guide to Key Types of Healthcare Software 3) Comparing the US and Canadian Health Care Systems: 4 Differences You Need to Know 4) Deloitte Insights – Electronic Health Records – Deloitte 2018 survey of US Physicians White Star Capital
  29. 29. Key Sub-Sectors Some of the key subsectors in healthcare software we see are data management and exchange, decision tools and predictive analytics, and medical workflow businesses 29White Star Capital Data Management and Exchange Systems used by both providers and patients to securely exchange, store and manage all medical information • Electronic Medical Record (EMR) systems • Electronic Health Record (EHR) systems • Revenue Cycle Management (RCM) • Data standardization and exchange platforms • Data compliance and security • Personal patient health record management Decision and Predictive Analytics Technologies that help providers and insurers make better decisions based on precedent case data and predictive models • Risk and liability assessment • Treatment selection, optimization • Healthcare compliance analytics • Disease prevention • Contextualization • Population health management and early intervention • Physician-patient matching • High-cost patient identification • Comorbidity identification Medical Workflow Systems used by doctors and patients to securely exchange, store and manage all medical information • Doctor-to-doctor care collaboration • Payroll management • Task and process automation • Visit notes transcription • Patient admission and discharge • Research collaboration tools • Recruiting and training • Hospital maintenance management platforms • Care team coordination
  30. 30. Trends Challenges 1) “IOM Report: Estimated $750B Wasted Annually In Health Care System,” Kaiser Health News, Sept. 7, 2012 2) “Volume to value-based care: Physicians are willing to manage cost but lack data and tools,” Deloitte, October 2018 Key Trends and Challenges Around 30% of health-care spend is lost to fraud1, waste and abuse. Many startups have tried to take on the challenge to build companies tackling cyber attacks and fraud. Security A shift towards value-based care reimbursement demands tools to measure success and analyze costs related to outcomes2. Value-Based Care All providers must navigate a complex and everchanging regulatory environment. This propels growth in businesses providing tools to track and estimate compliance risk. Compliance AI and ML is transforming the healthcare sector by advancing tools to automate task and empower providers to do their job more effectively and efficiently. Automation Providers have to tackle complex issues in less time – leveraging big data and predictive analytics helps provide actionable insights. Predictive Analytics The push toward interoperability and the 21st Century Cures Act aiming to increase health record transparency fuel innovation in data capture, normalization and exchange. Effective Data Capture Shifting to a new software or cloud infrastructure can be challenging and costly, which can often discourage hospitals from adopting new systems. Integration Lack of system interoperability is the biggest operational challenges for healthcare, holding substantive advances in the patient experience. Interoperability Poor data normalization is one of the key challenges on the road to improve system interoperability. Data Normalization Many data protection and processes regulations (like HIPPAA, CMIA, or GDPR in the EU), add significant cost and time to developing a compliant software. Regulation The healthcare software market is very fragmented with many small players building niche products, which makes the provider’s choice difficult. Differentiation Sales Cycle Hospitals’ budget is typically approved about a month before the prior year ends. Additionally, most national health systems have strict tender rules, which make adoption challenging. 30White Star Capital A slow but prominent push towards digitization of the complex and heavily regulated healthcare system has provided both opportunities and challenges for companies building healthcare software
  31. 31. White Star Capital Communication and Information 31
  32. 32. 6 413 10 26 36 20 24 17 32 32 The Communication and Information Tools segment consists of companies that provide software and services to attract new patients and facilitate communication among patients and stakeholders Communication – Overview Communication and Information funding 2011-2020* (in $m) Source: Pitchbook * As of April 2020 94 142 87 531 903 353 1,030 1,206 1,739 127 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 East Asia (excl. China) Europe North America Deal Count White Star Capital • Engagement and communication with patients continues to grow, from tracking patients virtually and accessing new channels of care to improving search capabilities. • The global patient engagement software market is projected to reach $19bn by 2024, up from an estimated $7bn in 2019. • While Q1 2020 funding has fallen in Europe and East Asia, North America is on track in 2020 to match 2019 funding. • According to a survey on online engagement with healthcare providers, 82% of consumers will read online reviews to evaluate a provider, with more than 30% of these consumers using search engines to find these reviews.1 • Social media will play a crucial role for patients exploring healthcare provider options. A PwC survey found that patients that had used social media in their decision-making found value in seeing appointment reminders, doctor appointment availability, specialist referrals and discounts and coupons.2 • While consumers become more engaged with their healthcare providers across digital channels, there will be an increasing risk of data breaches and a need for privacy and data security investments. 1) BrightLocal - Local Consumer Review Survey 2) PwC – Social Media “Likes” Healthcare
  33. 33. Key Sub-Sectors Engagement and Communication Tools Search Services and Scheduling Patient engagement software that facilities patient-provider communication across multiple online and in-person platforms Software that enables patients to search for services or schedule appointments online Healthcare Marketing Marketing software and services for hospitals, clinics and pharmacies to attract new patients • Doctor-patient communication tools • Voice, alarm and text communication tools • Voice and messaging collaboration tools • Medical community social networks • Digital encyclopaedias for pharmacists and patients • Community engagement and healthcare education • Online appointment booking and scheduling • Search-and-compare shopping platform • Online marketplaces for programs and services • Network-based doctor discovery • On-demand physician house calling services • Information exchange for doctor-patient matching • Resources and contents to educate and engage • Waiting room devices to deliver insights • Educational wallboards, tablets and posters • Data analysis tools for physician alignment and improved outcomes • Platforms for user- generated healthcare content Communication and Information Tools are segmented into three areas that all allow knowledge and insights to be shared conveniently and extensively 33White Star Capital
  34. 34. Trends Challenges 1) “IOM Report: Estimated $750B Wasted Annually In Health Care System,” Kaiser Health News, Sept. 7, 2012 2) “Volume to value-based care: Physicians are willing to manage cost but lack data and tools,” Deloitte, October 2018 Key Trends and Challenges As mobile device accessibility improves, doctors, patients and other stakeholders will expect quick and easy communication over messaging and media platforms. Mobile Adoption Emerging technologies, such as AI, ML and big data will play an important role in automating customer support, online search and discovery and personalized services. New Technologies As hospitals adopt online technologies, data collected regarding patients and treatment will need to be securely protected and shared within integrated systems. Data Privacy While many new products and services are commercially and technologically viable, they must also be clinically validated to improve safety, efficacy or outcomes. Clinical Validation Online reviews, ratings and social media feedback will increasingly be insightful and relied-upon sources of information about medical facilities and providers. Online Reviews As healthcare search engines become increasingly widespread1, healthcare providers will need to optimize their marketing through SEO and other digital services. Search Engines Regulatory mandates that protect sensitive health data may impact the development of communications tools, social media platforms and scheduling services. Regulation The risks of misinformation and misdiagnosis increase on virtual platforms, particularly for services intended to market or advertise treatments, healthcare providers or doctors. Misinformation Rapidly improving out-patient services will drive adoption and improvement of voice and video communication, particularly between doctors and their patients. Voice and Video Consumer-led care is driving a need for providers to constantly inform and engage their patients through online content, tools and educational resources. Online Engagement Healthcare data is often kept in different silos, from EHR systems, paper documents and insurance registries, so new platforms can be difficult to integrate and scale. Industry Complexity Cyber Threats As patient information is moved online, the threat of cyber attacks and data theft will become increasingly prevalent, which requires increased cyber security and investment. 34White Star Capital The proliferation of online reviews and increased transparency has not skipped the care system. Providers across the world are seeking way to attract and engage patients, while navigating complex regulatory system
  35. 35. White Star Capital Global Outlook 3 35
  36. 36. North America Government Support Government Funding Regulations • The HITECH Act1 is a federal legislation that empowers the Department of Health and Human Services (HHS) to establish programs to improve health care quality, safety, and efficiency by furthering the health IT, including EHR and private and secure electronic health information exchange • Centers for Medicare & Medicaid Services (CMS), Food and Drug Administration (FDA) and ONC establish polices that form the building blocks of the US federal government’s digital health tech strategy2 • The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are both congressionally-mandated R&D funding programs • America’s Seed Fund3, powered by the National Science Foundation, awards $200m in funding each year to entrepreneurs across the country, investing up to $1.25m in seed funding without taking any equity • Financial incentives4 offered by federal government, such as those for physicians willing to adopt EHRs • HIPAA5 of 1996: established national standards for electronic healthcare transactions and national identifiers for providers, health insurance plans, and employers • HITECH Act6 of 2009: gave HHS authority to establish programs to improve healthcare quality, safety, and efficiency through the promotion of health IT, including EHRs and HIEs • FDASIA7 of 2012: directed HHS to develop strategy for health IT regulatory framework • 21st Century Cures Act8 of 2016: included provisions that will improve the flow and exchange of electronic health information Spotlight on the United States Case Study: Canada CANImmunize: a mobile app and web platform that created the foundation for data exchange and vaccine surveillance at a national level 36 1) Heath IT Legislation - 21st Century Cures Act 2) Federal Health IT Strategic Plan 3) America's Seed Fund 4) The Federal Government Has Put Billions into Promoting Electronic Health Record Use 5) HIPAA Privacy Rule 6) US Health Online - HITECH Act Summary 7) FDASIA Health IT Report 8) Achieving The Interoperability Promise Of 21st Century Cures White Star Capital
  37. 37. Europe Government Support Government Funding Regulations • Horizon 20205 provides €80bn in funding from 2014-2020 through grants to research and innovation projects • Horizon Europe6 will succeed Horizon 2020 and provide €100bn in funding from 2021- 2027 • German Innovation Fund7 receives €200m each year until 2024, with funding for digital health innovation • UK Research and Innovation’s Digital Health Technology Catalyst8, a £35m fund run over 4 years giving grants to digital health companies and projects Spotlight on the European Union Case Study: Estonia e-Health System: a nationwide electronic healthcare system including EHRs, digital registration services, digital image program, digital prescriptions, statistics services, e- ambulance system, and decision support system • EU E-Privacy Directive of 2002 and EU General Data Protection Regulation of 2016 provide legal framework to ensure digital privacy, with implications for digital health • EU Electronic Commerce Directive9 also regulates eHealth and mHealth • EU Cross-Border Healthcare Directive10 discusses interoperability and eHealth services • EU Medical Devices Directive11 also regulates certain digital health solutions • In the UK, digital health is regulated by the Data Protection Act12, Information Commissioner’s Office guidance on mobile apps, Consumer Rights Act of 2015, Medical Device Regulation of 2017, and NHS policies • EU’s eHealth Action Plan1 2012-2020 proposed actions to boost the deployment of eHealth services • EU’s Digital Single Market Strategy2 (DSM) launched in 2015 with health listed as one of the main sectors • EU Commission’s Communication on the Transformation of Digital Health and Care3 of 2018 aimed to enhance digitization of the healthcare sector • European Parliament endorsed a digital health resolution4 in 2019, calling to further develop digital health systems and standardize regulation of mHealth/eHealth 37 1) Innovative healthcare in the 21st century 2) Digital single market strategy could help healthcare transcend borders 3) EC Europa - Live, work, travel in the EU 4) European Parliament - 12.12.2019 Motion for a resolution 5) EC Europa - What is Horizon 2020 6) EC Europa - Horizon Europe - the next research and innovation framework programme 7) Digital Healthcare Act (DVG) 8) UK Research and Innovation - Leading-edge healthcare 9) EC Europa - Digital Single Market 10) EC Europa - Cross Border Care 11) Covington Digital Health 12) Gov.UK - Data Protection White Star Capital
  38. 38. East & Southeast Asia Government Support Government Funding Regulations Spotlight on Japan & South Korea Case Study: Singapore FitBit’s collaboration9 with Singapore’s Health Promotion Board (HPB): an initiative called Live Healthy SG that will harness technology, behavioral insights, and analytics • Japan’s Global Health Innovative Technology Fund4 launched in 2013 with over $100m committed over 5 years, which has steadily increased since then with the addition of new sponsors and partners • Japan’s J-Startup5 program from the Ministry of Economy, Trade, and Industry cultivates promising Japanese startups and provides them with extensive support • Korea has the Ministry of Health and Welfare’s fund for precision medicine development, K-Startup Grand Challenge6 startup accelerator program, and various government programs7 to support startups • Japan’s Health, Labor, and Welfare Ministry unveiled its vision for wider use of telemedicine applications in “Japan Vision: Health Care 2035”1 • Japan’s Pharmaceutical & Medical Device Agency (PMDA) established a working group2 to decide on approval criteria for solutions using AI • Korea’s digital healthcare ecosystem3 is supported by government institutions, regulatory bodies, industry associations, public universities, and hospital systems, with the Ministry of Food and Drug Safety (MFDS) also issuing “Smart Healthcare Medical Devices: Technology Standards Report 2018” • Japan introduced the Medical Big Data Law8 of 2017, detailing provisions for handling personal medical data, the liberalization of telemedicine, and a timeline for allowing online consultations to be covered by health insurance • Korea has strict and vague regulations that pose barriers for digital health, including the Personal Information Protection Act (PIPA), Medical Services Act, and Guidelines for the De-Identification of Personal Information (GDPI) 38 1) Intralink - Is digital health finally taking off in Japan? 2) Regulatory progress of Artificial Intelligence 3) Digital Health South Korea - Market Intelligence Report 4) GHIT Fund 5) J-startup 6) K-Startup Grand Challenge 7) Korean Government Agencies That Support Startups 8) Is digital health finally taking off in Japan? 9) Fitbit partners with Singapore’s HPB on population-based public health initiative White Star Capital
  39. 39. White Star Capital Partnering with White Star Capital 4 39
  40. 40. Introduction to White Star Capital A Global Technology Investment Platform White Star Capital is a global fund investing in Series A and B. Our footprint is global: we have 7 offices in Guernsey, New York, Paris, London, Montreal, Tokyo and Hong Kong. We are partnering with exceptional entrepreneurs with global ambitions and leverage our extensive experience and international network to help them scale their business internationally. Our investments across the world include Dollar Shave Club, Meero, Tier, Parsley Health, Butternut Box and Freshly. 3 Continents With a presence in North America, Western Europe and Asia, we invest in early-stage technology companies with global ambitions I18N We leverage our experience founding and scaling businesses to support the internationalisation of our start-ups Track Record Our current funds have close to $300m under management and a portfolio of 25+ core companies which have raised over $1bn+ Team An ideal balance between entrepreneurial and operational experience with financial and M&A experience Global Presence and Portfolio 40 Physical Hubs Core Hubs France, Germany,ROEUnited States Canada UK and Nordics SEA White Star Capital
  41. 41. C O M P A N Y D E S C R I P T I O N Parsley Health is a New-York-based digital health company focusing on holistic approach to health and wellness. Parsley offers annual memberships to access their network of doctors and coaches both in-person and virtually in over 31+ states. Parsley specializes in treatment of ongoing condition such as eczema, hormonal imbalance, depression, and digestive issues. I N V E S T M E N T R A T I O N A L E Millennials want to receive healthcare radically different than previous generations. Born between 1981 and 1996, millennials grew up in a technology-powered consumer environment where transparency, rapid delivery, and convenience are the norm. This shapes their consumption patterns and values including their increased focus on wellness services and preventive care. The Global health and wellness (H&W) has evolved into a $4.2tn market, growing twice as quickly as global economic output (6.4% versus 3.6%), and comprising 5.3% of it. Millennials are used to dedicating significantly more of their disposable income to healthcare spending, but demand price transparency. Despite being relatively worse off financially than the previous generation, when it comes to healthcare, millennials are spending nearly twice as much as their parents and grandparents. 2019 STAGE INVESTED TOTAL RAISEDWSC INVESTED IN Series B $36m HQ: New York, USA Robin Berzin CEO / Founder Brent Tworetzky COO O U R O U T L O O K O N S I M I L A R D I G I T A L H E A L T H O P P O R T U N I T I E S The millennial generation consumes healthcare in a very different way than the previous age groups. Transparency, convenience and deep doctor-patient relationship are becoming tables takes. Healthcare spending is soaring globally and so are patients’ out-of-pocket costs. We believe winning strategies will lead to democratizing access to care and provision of services centered around value and a specific needs. White Star Capital Portfolio Companies 41White Star Capital
  42. 42. C O M P A N Y D E S C R I P T I O N Dialogue is a B2B platform offering primary care telemedicine services for company employees. Users (employees) can text or video chat with physicians and nurse practitioners using Dialogue’s platform instead of visiting a clinic. I N V E S T M E N T R A T I O N A L E The telemedicine market is gaining a substantial momentum, growing at a 36% CAGR to reach $70bn globally by 2025, according to BCG. This is in part fueled by improvement in regulatory framework across North America and Europe and increasing patient willingness to interact virtually with their care providers. As a leading player in the Canadian market, Dialogue is well positioned to enter new markets with similar healthcare systems such as France and Germany. Employers are seeking new ways of increasing employee attraction and retention. Furthermore, many are investing in ways to improve the overall health of their employees which increases productivity and lowers employee insurance benefit costs. 2018 STAGE INVESTED TOTAL RAISEDWSC INVESTED IN Series A $45m HQ: Montreal, Canada O U R O U T L O O K O N S I M I L A R D I G I T A L H E A L T H O P P O R T U N I T I E S Virtual care is seeing a seminal moment in terms of patient adoption. This is in part due to adoption by younger and more digitally native generations as well as the recent COVID-19 pandemic, which has truly tough the sector on the importance of telemedicine. We believe that this trend will continue. Primary care is an obvious starting point, but we see the penetration rates of virtual care increasing across different (especially low-touch) specialties, such as psychiatry and chronic condition monitoring. White Star Capital Portfolio Companies Cherif Habib CEO / Founder Anna Chif COO / Co-Founder 42White Star Capital
  43. 43. C O M P A N Y D E S C R I P T I O N Echo is the UK's leading disease condition management platform which allows users to order their prescription medication directly through an app by connecting them with their NHS general practitioner and track adherence. I N V E S T M E N T R A T I O N A L E There are over 15m patients in the UK suffering from long term conditions, with this number expected to grow to 18m by 2025; yet the £9.2bn market for prescription medicine is highly antiquated and based on fax, pen and paper and inefficient stream of patient visits of both GPs and pharmacy. Echo was established in 2015 to improve the entire process of obtaining prescription medicine. Set up by a complementary team of founders with relevant experience, Echo has, prior to our investment, acquired over 12,000 patients (called “nominees”) with very limited marketing. Echo maintains a high number of touch points with their user base. Almost 97% of users opt in for in- app notification. This opens an opportunity for Echo to have an almost daily engagement with its users and monetize this engagement by adding additional products such as Over the Counter (OTC) medicine, Digital Therapeutics, and other ways to track and improve patient’s health. 2017 STAGE INVESTED EXITWSC INVESTED IN Series A Acquired by McKesson HQ: London, United Kingdom Roger Hassan CEO Stephen Bourke CXO/Founder O U R O U T L O O K O N S I M I L A R D I G I T A L H E A L T H O P P O R T U N I T I E S The pharmacy market is highly fragmented and has not changed or innovated in decades. We see the most immediate and urgent are of innovation to happen around “super users” i.e. patients suffering from long-term conditions, who require subscription medication on a regular basis. The COVID-19 Pandemic has accelerated growth and penetration of on-demand services in various categories including pharmacy. We believe this sector creates a large opportunity globally due to its tendency to attract high LTV users with high repeat purchase tendency. White Star Capital Portfolio Companies 43White Star Capital
  44. 44. C O M P A N Y D E S C R I P T I O N Himedi is a Seoul-based medical tourism platform that acquires GCC (Gulf Cooperation Council, Middle Eastern) patients for Korean hospitals and takes commission on medical cost. The company also cross-sells services such as translation, transportation, hotel, tourism packages. I N V E S T M E N T R A T I O N A L E Global medical tourism market is rapidly growing. The global medical tourism market is projected to grow by 22% CAGR (2019-2026) to reach $140bn in total size by 20261. White Star Capital estimates the total medical spend made abroad by GCC countries to be $21bn annually, representing a very large opportunity for Himedi. South Korea is a popular medical tourism destination. Korea’s advanced medical infrastructure, comparatively low doctor wages, excess supply of medical service all make the country stand out as a competitive medical tourism destination. Middle Eastern patients are an attractive target audience for the medical tourism industry. GCC’s local medical infrastructure is insufficient to keep up with growing healthcare demand. 2020 STAGE INVESTED TOTAL RAISEDWSC INVESTED IN Series A $8.5m HQ: Seoul, South Korea Jay Lee Co-CEO / Founder Donkyo Seo Co-CEO O U R O U T L O O K O N S I M I L A R D I G I T A L H E A L T H O P P O R T U N I T I E S Competitive medical tourism businesses will offer unique capabilities to not only enhance medical tourist inflow through direct patient acquisition, but also strengthen patient-hospital engagement by facilitating repeat visit, cross-selling treatments offered by hospitals, and supplying end-to-end synergistic capabilities that the hospitals lack. Strong partnerships with local hospitals will extend to transparent information sharing between competitive medical tourism companies and partner hospitals. White Star Capital Portfolio Companies 44White Star Capital

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