Europe’s healthtech sector has grown significantly over the past two years amid the COVID-19 pandemic, with total capital invested having risen from US$1.7 billion in 2017 to close to US$10 billion in 2021. Although much of the funding activities have so far been centered around telemedicine, a new generation of healthtech entrepreneurs are starting to enter the sector and giving rise to technology businesses outside of the segment.
Many of Europe’s most valuable healthtech businesses were started by entrepreneurs with minimal background in health, the report notes. But many younger startups are now catching up, and these are being led by founders with sector experience at healthtech unicorns.
The company, which claims 300,000 customers, is an insurtech unicorn valued at US$2.85 billion that provides a digital insurance service, offering simple and seamless insurance coverage with reimbursements, easy claim handling and gives users access to medical professionals, both through in-person appointments and by video calls.
European healthtech startups are projected to secure a total of US$5 billion this year, down 50% from 2021’s record but still up by a significant 38% from 2020 levels. Healthtech deal count, meanwhile, is expected to drop by just 18% in 2022, against 26% for fintech and 32% for transport tech, indicating that funding activity in the sector is performing better than other tech verticals.
In 2022, telemedicine continued to be the largest healthtech segment, securing about EUR 1.5 billion in funding, as of October 30. Biotechnology/drug development took the second position, followed by hospital/clinical management and testing and diagnostics.
Growth in the software segment will be further driven by rising demand from insurers and other healthcare IT providers for technology solutions, Finch Capital predicts, a growth that’s expected to help the overall European healthtech funding market to bounce back next year.