Predicting the bull run of the health tech ventures
Dot com bubble has become a gold standard in boom and bust cycle phenomenon for the startups. Dot com craze ran for about 7 years, and 1,000+ companies. It's March 2000 and 80% of the dot com value is lost with only 5 surviving companies. In 2000’s, social media platforms were the new craze, with only a handful surviving within a decade. eCommerce and Fintech startups have enjoyed the largest bull run, of over 15 years and still going strong. Retail and finance are almost 50% of the global economy, and there is a lot of ground to be covered before their oil well rings dry. As long as ventures are solving a real problem, retail and fintech startups can expect another decade full of fundings and IPOs.
COVID Pandemic has been many things negative, and also has been a catalyst of tech adoption in every sphere of life. Health tech adoption has been expedited by at least 10 years, thanks to the lockdowns and social distancing. Right now, health tech companies are riding on a rocket that has got boosters running on steroids. There are a lot of problems to be solved and a lot of money to be made. Well, you make money only when you exit an investment. A trillion dollar question is, when is the right time to exit a health tech venture? How long will the health tech bull run last?
Healthcare employs more people than any other industry or even military. Every human and many domestic animals would have a brush with healthcare establishment more than once in their lifetime. Traditionally, the healthcare industry (pharma, hospitals, and insurance) has made higher returns than the overall stock market. Thus, healthcare in many ways is comparable to the retail and finance sector for the bull run time period. Healthcare and education industries are notorious for carrying very high inertia and resistance to change. It would take longer than expected to materialize complete transformation of these sectors. Every year, the focus of the investments would shift, but the overall confidence in these sectors has more than two decades of steam.
In 2020, the main focus of health tech was telemedicine and virtually connecting patients with clinicians. In 2021, data science made bigger strides and the focus has been drifting to predictive analytics and bedside diagnostic support. Precision (personalized) medicine is the jackpot that some venture would hit in the coming 2-3 years. The increased computing power of machines is revolutionising and democratizing the biotech industry. The current biotech companies would spin out game changing solutions 2025 onwards. And then there is a brain computer interface tech that sits on the circumference of health tech, and would be bigger than the internet itself. 2030 onwards, a mixture of personalised gene therapies administered by virtual doctors, assisted by precision tech will change the way healthcare is delivered. Insurers, hospitals and biotech would merge into a single entity. Health tech is expensive. The target is not just to become a unicorn ($1 billion valuation), but to raise a billion dollars to invest in tech development. Health tech has the potential to redefine the investment landscape over the next two decades. Even the largest VCs would dwarf in front of the investment needs of health tech ventures.