hile many industries are taking a major hit due to the ongoing pandemic, the healthcare technology market continues to grow. In fact, total healthcare-related innovation funding for H1 2020 hit $9.1 billion, up nearly 19% compared to the same period in 2019, according to StartUp Health’s 2020 Midyear Funding Report.
As the virus continues to pose new challenges for the industry, investors are rushing to pump money into startups addressing healthcare sub-sectors ranging from telemedicine to patient financial engagement.
The inefficiencies and frustrations of the U.S. healthcare system make it a tempting target for disruption-oriented VCs. But here’s the hard truth: Healthcare is unlike any other industry. It has a morass of regulations that a “move-fast-and-break-things” startup can’t handle over the long term.
Healthcare is also a sensitive, personal issue. As such, patients are inherently reluctant to adapt to new technologies, even when they’re dissatisfied with the status quo. Consequently, it’s crucial that startup technology leaders in this space understand how to wade through these unpredictable waters in order to thrive and deliver a strong ROI for investors.
But here’s the hard truth: Healthcare is unlike any other industry. It has a morass of regulations that a “move-fast-and-break-things” startup can’t handle over the long term.
Entering health technology
VCs are seeing all the latest headlines about COVID-19 and spying a potential money-making opportunity to invest capital into innovative startups. However, they must overcome barriers to entry when offering patient-focused, technology-centric solutions before they can compete with legacy players. As the saying goes, “Luck is what happens when preparation meets opportunity,” and, within the healthcare startup space, COVID-19 presents an opportunity for those who stood ready to offer a solution to the market before the situation became a crisis.