SamaCare’s Post

Digital health founders pull inspiration to solve healthcare problems from a variety of sources and experiences. Rebecca Mitchell, MD and Kathy Ku from our Investment Team share what some founders learned from their experiences as operators and how they've applied those lessons as they've started their own companies. Read all about it here: https://lnkd.in/gdf6wpRq #digitalhealthinnovation #healthcare #digitalhealthstartups #digitalhealthoperators

Growth or profitability? What matters most to digital health investors today? Last week at the leading digital health conference ViVE, Sapphire Ventures Partner Cathy Gao spoke with MedCity News’ Katie Adams to weigh in on the current debate. Despite the shift towards valuing profitability, growth remains crucial in the digital health sector for two reasons: 🔵 Service Dynamics: Digital health companies often have significant service components that can negatively affect profitability, especially during rapid growth phases, requiring investors to carefully evaluate a company's growth vs. its efficiency. 🔵 Uneven Growth Patterns: The growth of digital health startups tends to be uneven, with periods of rapid expansion followed by stagnation due to the nature of securing large contracts and the lengthy sales cycles common in healthcare. For more on this topic and Cathy’s perspectives, check out the complete article: https://lnkd.in/gftVTH-c #digitalhealth #VentureCapital #healthtech

We are thrilled to announce the newest cohort of Health Tech Ventures joining Advisory5 this spring of 2024! Meet the innovators driving change in healthcare, who have used Advisory5 to rapidly and affordably establish their advisory boards: Nilesh Bhandari Founder of Advanced Health Academy, Nilesh brings extensive experience in product strategy and business development. His platform provides lab diagnostic interpretations, increasing revenues and reimbursements for clients. With an MBA from Wharton, Nilesh excels in forging strategic partnerships and driving healthcare innovation. Helen Pak-Harvey CEO and Founder of Wholistics.Health, Helen is transforming healthcare through information technology and digital enablement. With a PhD in Organic Chemistry and an Executive MBA from Duke University, she combines scientific expertise with business acumen to drive innovation in patient engagement and disease prevention. 𝐎𝐥𝐞𝐧𝐚 𝐁𝐮𝐫𝐲𝐤𝐢𝐧𝐚 A resilient entrepreneur who fled Ukraine in 2022, Olena quickly obtained a cosmetology license and expanded her small office into a thriving salon. Now, she is venturing into product development, continuing her journey of resilience and innovation. Michelle Fritsch, PharmD, BCGP Founder and owner of Propel Comprehensive Wellness, Dr. Fritsch is a board-certified geriatric pharmacist with over 30 years of experience in healthcare. Her company prepares people for health and purpose after their primary career, addressing the unique needs of retirees. Special thanks to our advisors: George Keller, Margaret Kocherga, PhD, Ken Russell, PhD, Bryan Dennstedt🌱, Jay Kleinman, Douglas Neely, CMPE, MHA, Matthew Floyd 𝐀𝐛𝐨𝐮𝐭 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲5 At Advisory5, we build advisory boards that work for both advisors and founders in the health tech sector. Unlike typical marketplaces, our advisors choose the startups they want to support, ensuring a mutual fit and enhancing collaboration. Together, we drive innovation and success in health tech. Please welcome our new founder to the program with a comment, like, or share of this post! 🌟 #HealthTech #Innovation #AdvisoryBoard #Healthcare #Entrepreneurship #Advisory5

About a year ago, I had an idea of leveraging our Traction5 platform we’ve built with Denis Demichev to offer advisory boards to startups, focusing on specific industries such as health tech. This vision took some time to materialize and get fleshed out, and it is currently in an exciting pilot phase. There’s a lot more to learn, for sure. Yet, I’m blown away by the passion and determination of founders and advisors who have helped me turn this idea into a reality. Advisory5 along side Kepler Team recently hosted a Reverse Pitch Challenge with three hospital systems as part of the Mid-Atlantic Telehealth Resource Center (MATRC) conference. We’re also gearing up for our first MedTech Mavericks Pitching event at the IME South Conference in Charlotte on June 6th. It’s still early days, but my experience with Groove Management has taught me the importance of celebrating small wins. So, this Friday, I’m taking a moment to celebrate the progress we’ve made with this incredible health tech community. I am super excited for what lies ahead. #HealthTech #Innovation #AdvisoryBoards #Entrepreneurship #SmallWins #Advisory5

Sunday Thoughts (Greek Island Edition) I haven’t been posting much recently so I might as well post a controversial thought while on the beach. Digital health is a suffering sector. I think it’s obvious why but we don’t speak about it often enough. The way the media measures the success of a digital health company is how much funding it raises. “Is it a unicorn yet?” I hear them muse. The attention starts to shine on companies without a viable valuable proposition (i.e. no market research with clinicians or patients or even an understanding of health system business models). These companies then take away the resources and support from companies that actually are attempting to be evidence based and impactful. Investors are complicit in this often as they are looking for a route to exit and that means being able to see an aggressive path for the sales and marketing of a company even if it’s ultimately a house of cards in terms of having any positive impact for healthcare. I’m not proposing a solution to this systemic problem. I’m simply taking an opportunity to share the thought. Perhaps something will change over time because there are too many good companies being neglected. #digitalhealth #healthcare #startups #investors #venturecapital #innovation The AbedGraham Group

Healthcare can be tricky for startups. In addition to all the usual uphill battles that entrepreneurs in any industry face, healthcare has a heavy legacy layer that adds another level of complexity for new companies to navigate. I recently spoke with Stephen Wunker, a contributor to Forbes, about four key lessons we implemented at Arrive Health. Picking a stakeholder: Because healthcare is so fragmented, it can be hard to turn partnerships into broader success. What we did: Arrive Health focused hard on making the system compelling for doctors. Demand from the health systems then enabled other stakeholders to get on board. Use regulation to your advantage: Regulation is often seen as an enemy, but sometimes it can create new opportunities. In our case, Medicare changed its rules in 2021 to require that Medicare Part D plans offer “a real-time drug benefit tool." That was huge for us. Experimentation: Experimentation sometimes gets a bad rap in healthcare. To some stakeholders, it suggests that those companies' products or services are unreliable or inaccurate. In reality, constant iteration is just as important for startups in healthcare as it is in any other industry. Planning for growth: Startups often have to look to adjacent markets for growth. One example: When doctors used paper slips, you could go wherever you wanted for prescriptions. We adopted e-prescribing, and consumer choice went away. But here's the catch: there’s opportunity to leverage new technologies to re-introduce consumer choice at the point of care and throughout the patient experience. That is what Arrive Health is doing. A big thanks to Steve for doing the interview – the full version is here: https://lnkd.in/g8At8umM #startup #healthcare #regulation #startups

Redefining Success in Digital Health! With funding waning, what makes a digital health startup withstand the test of time? For anyone involved in healthcare innovation, a short good read navigating through the complexities of funding, market dynamics, and the impact of the economic environment on startups. The potential and pitfalls of digital health innovation must be foreseen and planned for carefully! https://lnkd.in/eFYHGXFj

Digital health startup funding was $5.7B in the first 6 months of 2024. Thanks to Rock Health's investment report, the industry is on-pace to raise more funding than 2023, which is a welcome sign for many later-stage healthcare companies. It does feel like more rounds are being filled by existing investors (i.e., insider rounds) these days, but founders need to raise from whoever will invest at a reasonable valuations / limited liquidation preferences. Feels like early 2025 is the target for many digital health companies to go public. For most unprofitable companies, this will allow them to raise additional capital at a IPO and provide liquidity to existing investors. Now the revenue multiple expectations might be lower than what investors want, but that's the market. The median software multiple is 5.2x in the public markets. Obviously pure software companies will generally trade at higher multiples that digital health companies that involve tech-enabled clinician services (i.e., lower gross margins). I think the organizations who trade for a valuation premium will be both incredibly strategic with industry tail-winds (i.e., home-based) and profitable. But that's just my two cents. Thoughts? --- Credit: Rock Health

Amidst the challenges of today’s healthcare market, expanding access to care requires innovation from all stakeholders. Health systems are no exception. While the core mission of health systems is to provide high-quality care for all patients, they must also prioritize innovation to ensure their own financial and institutional longevity as providers of healthcare. According to a recent study by McKinsey, 70% of surveyed health system executives across the US “said they intend to invest more in diversification over the next 3 years.” The call to action for more innovative ways to expand health access and deliver care is coming from the most powerful seats across health systems, which are looking to their business development and strategy teams to bring that to life. Health systems and health startups are both working to drive revenues, become cost efficient, and improve access to expanded care. While there will always be a level of “I don’t know what I don’t know” when entering into these initial discussions from both sides, the best approach is to engage more deeply and discover if there are actual synergies. With rising costs of care, labor shortages, and skyrocketing demands for care, there is a clear call to action for more innovative models. The collaboration between health systems and startups has the power to bridge existing care gaps. With the involvement of key stakeholders, asking the right questions, and alignment to a shared mission, we can advance and broaden care services for all. #innovation #healthcare #startup https://lnkd.in/gtpEbKqZ

The H1 2023 digital health funding climate was characterized by the highest proportion of “unlabeled” raises (a capital raise without an associated round label, e.g. Series A) since we began tracking sector funding in 2011. An astonishing 41% of H1 2023’s digital health funding deals were unlabeled. Unlabeled funding is one way for startups to delay “valuation haircuts” while they work toward proving out their clinical outcomes and business models. But investors and enterprise partners won’t be patient in waiting for startups to grow into commercial expectations. For enterprise customers reevaluating their digital health contracts signed during the pandemic, the delta between startups’ growth projections versus realities is even more top-of-mind.  To learn more about digital health startup behavior in H1 2023 and the potential impact for your enterprise organization, please reach out to advisory@rockhealth.com. Read the rest of the H1 funding recap: https://lnkd.in/gZa88a9C #digitalhealth #healthcareinnovation #venturecapital