We visualize where leading tech companies are placing strategic bets on healthcare startups across clinical research, genetics, drug delivery, and more.
Healthcare is an enormous — and inefficient — industry.In the US, healthcare represents 19% of national GDP, but 20% – 25% of healthcare spending is waste, according to some research estimates.
These inefficiencies are visible across the industry: there are over 175K medical coding professionals working to ensure doctors and hospitals get paid; the average cost of bringing a new drug to market is now a whopping $2.5B; and the cost of employer-based coverage is now over $20K a year.
Across the globe, growing markets, expensive inefficiencies, and increased demand for better healthcare make the industry a ripe target for leading tech companies globally.
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Last year in the US, investors poured a record $11B+ into digital health startups — a 16% uptick year-over-year. This year has seen big rounds go to companies innovating across health insurance (Clover Health raised a $500M Series E), genomics (Ginkgo BioWorks raised a $290M Series E at a $4.2B valuation), pharmacies (Capsule raised a $200M Series C), and more.
Meanwhile the world’s second-largest economy, China, is investing significantly in healthcare as a national priority as the population ages and demands better care. The country kick-started this effort with the 2009 New Healthcare Reform and the Healthy China 2030 Action Plan. Consequently, the Chinese healthcare market is growing at 17% CAGR, according to the World Health Organization.
As the sector evolves, health-focused companies aren’t the only ones interested in the digital health space. In 2019 YTD, leading tech companies have invested in 38 digital health companies, on track to match record-breaking 2018 levels (49 companies).