During Q3 2020, European HealthTech startups have nearly raised $2.3B approaching the 2019 record of $2,9B invested in the same time span. Today, more than 626 companies are active in Digital Health throughout Europe. 63% of those companies were created in the last 5 years.

In response to the rapid growth of the digital health sector, Karista publishes for the first time a European mapping of Digital Health investment funds (known as “e-health”). As the first-ever mapping of this kind in Europe, this mapping is meant to evolve and be updated over the next months.

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DEFINITIONS AND CRITERIAS

• How do we define the Digital Health sector?

This sector brings together companies belonging to the field of health in its broadest meaning (going fromprevention/wellness to digital therapy) and which developed software or digital technology as a differentiating factor.

• We included in this mapping all the funds with a global headquarter in France, Germany, Spain, Italy, United Kingdom, Netherlands, Austria, Luxembourg and Belgium.

• Based on public information (websites), we selected all the funds that invested (at least) in 3 companies belonging to the Digital Health sector in Europe.

• “Late stage” refers to B and following series.

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COMMENTS

• A total of 84 European funds invested in e-health (26 in France), including 14 dedicated funds (6 in France). The most active countries in the sector are France, followed by the United Kingdom and Germany.

• There are still very few funds dedicated to Digital Health in Europe and in France (respectively 17% and 23%). This is mainly due to the young maturity of this rapidly growing market. Indeed, the healthcare sector is now facing an acceleration of its digitalization, boosted by the rise of remote medicine and the disruption linked to the COVID pandemic.

• A vast majority of these funds invest in early stage (57% vs. 14% late stage and 29% multi-stage) in line with the maturity of European companies within the sector, which are often recently created. The average fund size is therefore moderate. Late stage and multi-stage funds invest more often in healthcare IT, a more established vertical.

• Funds usually investing in healthcare (Biotech, Medtech, Diagnostics…) are showing an increasing interest in digital healthcare. There has been a significant rise in their investments over the last two years. Generalist funds are also keeping a close eye on this sector and are gradually taking positions in it.

• Even though the e-health sector is accessible to all, the funds investing in Digital Health are mostly coming from the health sector. Furthermore, the classic criteria used to assess technology companies are only partially applicable in this sector.

• Despite their current limited presence on our continent for the past five years American funds have been arriving on the European market, and to a lesser extent, in France. In the healthcare sector in general, the French market is more difficult to understand than the other European markets, mainly because of a complex go-to-market. Often based in London, US funds first approach the UK market before moving on to the Belgian and Dutch markets. American funds most often intervene in France in late stage (3rd and subsequent rounds) in co-investment with local funds.

• The valuations of e-health companies are supported by the growing interest towards the sector (see above). For the time being, there have been too few exits (M&A and IPO deals), particularly from European companies, to be able to extrapolate on the performance of the sector.

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Although we have tried to be complete in our research, this mapping may not be exhaustive.

Please feel free to fill out this typeform to let us know about changes that need to be made!

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