Emerging Trends Part I: Healthcare

As we move into the final quarter of 2020, our team at Conduit sat down to analyze key emerging sectors that we’ve been watching closely. Critically, each of the sectors has drawn enormous interest from a range of strategic angels, early-stage funds, and growth funds alike. In the first part of this four-part series, we’ll focus specifically on emerging healthcare trends.

Last quarter, global healthcare financing rounds set new records in terms of both deal count and capital allocated. According to CB Insights, healthcare funding across three distinct regions, North America, Asia, and Europe, saw notable upticks in quarter over quarter funding activity. Asia alone experienced a 3x funding increase within the digital health sector.

Similarly, global telehealth funding hit a record high of $2.8 billion last quarter across 162 new deals. AI companies set a parallel high of $2 billion in fresh financing rounds. At Conduit, we tracked emerging trends across three ecosystems: senior care tech, AI, and mental health.

Projecting out into the final quarter of 2020 and beyond, COVID-19 will continue to shine a spotlight on a fragile senior care system both nationally and across the globe. As nursing homes and assisted living facilities continue to become crowded, a distinct and urgent need is felt for modern technology and healthcare platforms to assist in the transition. Telehealth platforms with predictive analytics tools will quickly become standard for senior care as facilities modernize, led by innovative companies like Curve Health.

Last quarter, the NYC-based senior tech company raised $6 million in seed financing as the platform seeks to build out its nursing telehealth tools. The company’s mission, fueled by the Lightspeed-led round, will scale the platform’s ability to analyze health information exchanges and billing in real time. Critically, as the pandemic accelerates investment interest in telehealth, we believe the long-term care space and post-acute analytics tools will emerge as leaders in the next generation of the sector at large.

Moving on to artificial intelligence, three distinct intra-sector trends will ultimately redefine patient care: diagnosis, process, and security. We believe security in particular has generated increased investment interest as healthcare system fraud has exploded in recent years. In 2020 alone, AI-driven healthcare technology drove over $4.9 billion in global investment activity.

By 2026, experts project that this statistic will scale to over $45 billion. Growth prospects in this space are particularly promising due to nascent cross-industry regulatory partnerships paired with the overwhelming data needs of the sector, which AI directly supports in its sorting and scraping capabilities. Among the leaders in the emerging AI space are Enlitic, which aids in advanced medical diagnostics, Zebra Medical, offering AI assistants for automatic clinical reports scanning, and PathAI, which leverages artificial intelligence to diagnose cancer.

Finally, shifting into the mental healthcare ecosystem, a new class of category-defining startups launched novel treatment solutions across therapy and prescription use cases. Over the past few months specifically, catalyzed by quarantine orders, mental health issues have skyrocketed. As it stands, approximately 50% of people with depression don’t get treatment. 47% of those affected can’t afford treatment. Among the leaders in this cohort are Brightside and Cerebral.

This past October, Cerebral announced its $35 million Series A to expand online mental health medication management and therapy to all 50 states. The company offers a mental health subscription that provides clients with ongoing, comprehensive access to online care and medication management for anxiety, depression, and insomnia for one flat monthly rate.

Operating in a similar vertical, Brightside makes it simple and affordable to get expert, personalized treatment for depression and anxiety, combining evidence-based treatment approaches with the latest technology to deliver the best care available. By combining medication with digital treatments, the rapidly scaling mental health space will continue to maintain its focus on driving high efficacy, comprehensive care for an influx of patients.

At Conduit, we connect the world’s best operator-investors and founders building the next generation of startups around the world.

As we scale our platform, understanding key market shifts across verticals will become increasingly vital. Our team will be digging deeper into emerging trends and first movers in the coming weeks, which you can find here.

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