Tech Convergence is Redefining Healthcare. It’s up to Communicators to Make it Last.
Big tech has revolutionized every facet of society, and healthcare is no exception. With a colossal market size of $4 trillion in the US alone, the American healthcare market continues to dominate consumer sentiment and investor commitment.
Over the last ten years, the healthcare industry has enjoyed a new era of prominence primarily driven by technological convergence across sub-sectors. Venture capital funding in health tech alone shot up from 6.7 billion in 2016 to 39.3 billion in 2021, and a corresponding increase in deal volume from 484 to 1134, respectively. Valuations have continued to climb across the same period, with the median health tech valuation jumping from 17 million in 2016 to over 57 million in 2022 – a 67% increase.
Solving Consumer Access
In many ways, these robust funding metrics are more indicative of the underlying issues that healthcare companies have struggled to address since the tech boom of the 2000s. While the critical MDs and PhDs that develop life-saving treatments remain the foundation of healthcare, consumer access has been a recurring pain point for patients and is ultimately what attracted technologists to innovate the sector.
Consumers everywhere continue to struggle with the patient experience services of their healthcare providers and report frustration with the disparate data, operations, and logistical solutions available to them. These are all issues that the tech industry has historically excelled in solving.
The recent funding craze has been catalyzed by the rapid emergence of consumer-first solutions at the heart of today’s diversified and interconnected healthcare ecosystem. Burgeoning startups in sub-sectors like age tech, digital health, life sciences, medtech, biotech, femtech, and more are quickly demonstrating that the industry’s future lies in technology and vertical-specific players.
As the category continues to mature, more sub-sectors are bursting on the scene, filled with inflated funding rounds and rapid growth – a clear indication that we should all be betting on health tech, and betting big.
Sub-sector Focus: Femtech
Investors are rapidly leading this charge. Take the femtech market, for example. This past June, Recharge Capital, a $6 billion thematic-first investment firm, announced the launch of its new $200 million women’s healthcare vehicle backed by some of the world’s most renowned investors: Peter Thiel of Thiel Capital, Shamrock Holdings of the Disney Family, Ian Osborne of Hedosophia, the Ozmen Family of the Sierra Nevada Corporation, the Olayan Family of the Olayan Group, and many others.
Recharge and its backers structured this fund to deploy technology and digitization into the global women’s healthcare ecosystem, aiming to reduce the costs of reproductive care and fertility services for patients. With this launch, the firm and its billionaire backers are sending a clear message across the industry: femtech is the next iteration of tech convergence in healthcare.
Recharge isn’t the only player betting big on the space. According to Pitchbook, nearly 300 femtech deals and over $2.5 billion in capital were deployed into the sector in 2021, a massive increase from under 25 deals and only $100 million, respectively, in 2008.
This investment surge has seen a corresponding increase in public awareness and communication. Over 700 traditional media articles covering the femtech market were published in 2021, up from only 110 in 2018.
Recharge’s launch alone garnered a wave of media coverage across global outlets, including Bloomberg, Axios, TechCrunch, Tech In Asia, Private Equity Hub, Femtech Insider, and many more. Clearly, the femtech sub-sector is a sign that vertical-specific healthcare categories are making strides across the industry, and communicators are taking notice.
Communicate to Differentiate
Firms across sub-sectors like femtech are quickly learning that disseminating a consumer-facing message is no simple task. Between the COVID-19 pandemic, misinformation, and broader insurance shortcomings, companies developing novel technologies to solve innately personal issues face greater headwinds than their peers in other industries. Health consumers don’t just have to trust these brands with their wallets; they have to trust them with their bodies and minds.
As a result, consistent, clear, and transparent messaging is more crucial than ever for the sub-sectors tackling hyper-specific health issues. Trust is a rare commodity in the increasingly polarized world of healthcare and should be viewed as a business imperative. Actions and values must align with a brand’s financial goals to resonate with its stakeholders.
While technologists continue to develop new sub-sectors of healthcare and attract institutional capital, strategic communication will prove to be the difference between those who shape consumer behavior, and those who follow it. Communications professionals are charged with bridging this gap between businesses and their customers. As more capital, talent, and innovation is infused into the broader healthcare market, companies and consumers alike will prove to be the benefactors.
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