The ANDHealth team was excited to attend the Digital Health Festival in Melbourne to meet more of the people and companies who are at the forefront of the digital health revolution. Great to see that Australia now has its own event showcasing digital health solutions for the entire health ecosystem
What could possibly attract more attention than a presentation on Unicorns and Fairy Dust by ANDHealth CEO Bronwyn Le Grice, ably assisted by Andie the Unicorn. As Bronwyn pointed out, the Unicorn is not a real creature but does help make a dry subject entertaining. Of course, in her presentation Unicorns & Fairy Dust: Cautionary Tales from the World of Digital Health she was talking about start ups with a value of over $1 billion.
Global digital health funding up 79% YoY
- Equity funding reached record US$57.2B in 2021.
- In 2021, Mega-rounds (US$100M) nearly doubled to 154.
DTx and Mental Health show record growth
- Mental health tech start-up funding increased 139% YoY, with 68% of the deals being early-stage.
- Digital therapeutics (DTx) start-ups secured a record US$3.4B across 122 deals.
A spree of exits and M&A consolidation
- Despite QoQ decline, the annual M&A deal count hit a record totalling 574 deals, up 44% YoY.
- US companies listing via SPACs as opposed to traditional IPOs.
After exploring the boom and bust stories of digital health unicorns, and providing a few cautionary tales, Bronwyn presented a realistic set of principles for digital health start ups to keep in mind as they go on their growth journey.
- Valuation is a means not an end.
- Raising capital has a cost (time, resources, time, legals, time, accounting, time, travel, time).
- The right investors will bring more than just $.
- Fair valuations and straight forward investment agreements cost less in the long run. What does it cost you (the founder) to raise the capital?
- Will this round set you up optimally for the next round, assuming you meet your milestones?
- Work backwards. At each stage of investment, investors need to realise 4x their invested capital.
- If you raise at an inflated valuation, then subsequently face a down round, investors will punish you for it.