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Research solutions, online marketplaces drawing healthtech investors per latest Galen Growth research: PRmoment Health Comms Review

PRmoment's weekly 'Healthcare Communications Review' column looks at the biggest healthcare trends every week and analyses the communications implications. In partnership with SPAG, A Finn Partners Company.

2022 was, as it has been dubbed, the winter of funding. As venture funds sought to go back to the basics of business model viability, how did the APAC health tech sector fare?

Galen Growth, a specialist in health research, and Finn Partners have released their latest research report, Digital Health Ecosystem-Asia Pacific, 2022 year-end report. 

The report examines major shifts and outlines best practices in investment strategies comparing Asia to the world scene examining 250 million data points over 14,000 ventures.

Main Findings 

According to the report private equity and business development dollars continue to flow towards digital health, however, directed toward specific therapeutic categories and technologies. 

Out of the total funding value deployed in 2022 for the region, research solutions and online marketplace clusters captured 49% of the total funds invested and, oncology and cardiovascular diseases were the most invested therapeutic areas.

  • Venture capital funding in Asia Pacific's digital health industry decreased during the first three quarters of 2022 but bounced back in Q4 ending the year at $5.79B, with a YoY decrease of 41% from 2021.
  • Venture funding deceleration was largely due to China's investment falling by 66% YoY - the lowest since 2017, amidst strict pandemic regulations. However, Northeast Asia's funding doubled to $1.9B, surpassing China and South Asia, which dropped by 30% compared to 2021.
  • Asia Pacific saw a 33% YoY decrease in M&A activity, but digital health ventures accounted for 60% of global acquisitions, driving industry consolidation. The slowdown in venture funding has fueled acquisitions, with only 34% of growth-stage ventures in Asia Pacific able to raise capital over the past 18 months.
  • In 2023, digital health ventures faced challenges due to declining venture valuations. However, the industry’s resilience in 2022 will strengthen the venture pipeline, driving innovation and business model viability to show the value of digital health tools in improving healthcare research and delivery.

What does this mean for communicators?

  • Ethical and accurate health communication becomes even more important.

  As business models and viability take precedence over valuation,                  communication plays a crucial role in helping end users understand the benefits of digital health products.

“With the slowdown of venture funding in 2022, digital health is anchoring back to reality, becoming more focused, and demanding more verification that ventures are offering solutions that will bring value to the digital health ecosystem,” said Julien de Salaberry, CEO and Galen Growth co-founder.
  •    Improving Patient outcomes through accurate communication    

 One outcome of digital health is that patients have more access to health than ever before. It, therefore, becomes key to working on patient outcomes by providing them with timely, accessible and accurate information.

“Compared to the pre-pandemic levels, digital health has shown clear signs of resilience with the Asia Pacific region witnessing an increase in funding,” said Aman Gupta, managing partner, health practice lead at SPAG – A Finn Partners company. “An in-depth evaluation of this market is important as globally 27% of digital health ventures were founded in Asia Pacific, making it the second largest ecosystem. A comprehensive overview of the market to allow various stakeholders to make informed decisions towards improving patient outcomes.”  

News of the week

  • Could we pick up health insurance without sharing details of past illnesses? Read more?
  • Why are TB and leprosy on the rise in Maharashtra even as Covid declines? Find out here.

Call out of the week

3 weeks to go before the early bird deadline for PRmoment Health Comms Awards 2023. Do apply here.

That's it for this week. Special thanks to SPAG, a FINN Partner company for their ongoing support for this weekly column.

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