In our first version of this blog post from March 2021, one part of our series Digital Health in Europe: A Data-Driven Blog Series by Speedinvest, we mapped out 142 startups and identified macro-level trends with the hope to give a comprehensive overview of the state of digital health in the DACH region. In this update, we present version 2.0 of the map and zoom in on 2021’s funding highlights and trends. TL;DR: it’s been a record-breaking year!
Compared to the previous version of the map, we’ve added 54 startup companies, proving that DACH continues to thrive in the digital health sector. Roughly 50% of the companies we’ve added were around before 2021, but didn’t meet our methodology criteria back then. The other half are companies that were actually founded (and funded) in 2021. The additions are spread across multiple sub-categories, with Women’s Health and Consumer having the biggest increase in activity, and Enabling Tech continuing to be the sub-category with the most overall companies.
This is the second version of our map and we’ll continue to expand and improve it. If your company is not on the map and you’d like to be included, please fill in this form and we’ll add you in the next update!
A few trends we saw in 2021:
Digital health seems to be maturing in the German-speaking world. In our blog from last year, we found that digital health startups in the region raised approximately €900m in VC funding between 2010 and 2020. With another €900m of VC funding in 2021 alone, this amount has doubled within the past 12 months. But, as we are only including data from rounds that are publicly available, the total amount of funding going to digital health companies over the last decade can be assumed to be well above €2bn. This is an impressive development and shows that there is a high investor appetite to fund the future of an industry that, despite lagging behind in terms of digitalization, still accounts for spending equal to more than 12% of Germany’s GDP.
Another sign that the healthcare ecosystem is growing is the increase in M&A activity in 2021. Tracking with more activity across all of Europe, there were seven exits in the region in 2021, totaling 17 since 2010. Notable mentions are Jameda’s acquisition by Docplanner and Medlanes’ acquisition by Zava. This is - especially on deal value - still an extremely low level compared to the US (the US saw 79 deals in Q3 of 2021 alone), but on par with the UK, which also had 17 exits since 2010. You can find out more about the European digital health exit landscape in our recent blog article.
In light of overall trends in VC, it’s no real surprise that round sizes and valuations have also started to soar in the digital health segment. In Germany alone, there were 12 rounds that were more than $15m. This is more than in the previous five years combined.
These Series A and growth Stage rounds are also the reason for the doubling in overall VC funding in 2021: looking only at Caresyntax ($130m), Mindmaze ($125m), Ada Health ($90m), Kaia Health ($75m), PlusDental (€35m), Wellster Healthtech (€35m), Formel Skin (€30m), Avi Medical ($28.5m), Kenbi (€23.5m), and Clue (€16m) the top 10 Scale-ups accounted for more than two-thirds of total VC funding in the space.
Last year we argued that one of the reasons for more activity in the digital health space are regulatory advancements, especially in Germany. Looking at the status quo, this can only be emphasized. While there have been some setbacks, such as the postponed rollout of e-prescriptions in Germany due to an unsuccessful test run, there is no doubt that many of the initiatives that have been started are here to stay and gaining traction:
This environment and regulatory tailwinds have led to an increase in the quantity and especially in the skill of founder teams tackling challenges in the healthcare system. Serial founders from other sectors are more likely to start something new in the space, and healthcare professionals are challenging the status quo more and more often with solutions they want to build from the ground up.
We are bullish on the future of digital health in Europe and would love to get in touch with you if you are too! Drop Felix Fein an email or get in touch on LinkedIn if you’d like to share feedback - or if you’re building a digital health startup and are looking for advice around funding!
Disclaimer: The aim of this map and blog is neither to be exhaustive nor to rank startups, but rather to chart the rapidly expanding DACH digital health startup ecosystem. Check out our methodology blog for our inclusion/exclusion criteria. In a nutshell: We’re only including companies that build health-focused software, have some form of VC or angel funding and were founded since 2010.
Sources: Dealroom, Crunchbase, internal deal flow research