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Healthcare and biotech have always been a hot industry in the startup and tech world, even before a deadly virus pushed investment in the sector to even higher heights. But it’s not just COVID-19 that’s sparking interest in the industry, according to investors and tech startups.

A slew of technological advancements and recent consumer shifts have attracted the bulk of investment, from breakthroughs in artificial intelligence to a new franchise on mental health issues and even more consumer interest in drug testing. home and preventive care.

Among the industry’s main growth drivers are regulatory changes, said Sundeep Peechu, general partner of Felicis Ventures, 1 which invests in start-ups.

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“When you release, from a regulatory standpoint, the ability to see patients on video calls for example, all of a sudden you change the modality,” he said. “Even though these technologies were available 10 years ago, if the regulations weren’t changing and they weren’t needed because people were willing to go to clinics, none of these businesses have exploded. … COVID has finally given that impetus.

It is unlikely that the progress made over the past two years will be completely reversed. While no one is sure how the pandemic will play out over the next year or so, industry insiders say that’s why they remain bullish on the strength of biotechnology and health technology, even in the dark. -beyond COVID-19.

Artificial intelligence

As in much of the tech world, artificial intelligence is fueling many advances in biotechnology. In particular, AI can analyze huge treasures of data with a precision and speed that humans simply cannot compete with.

And while the applications of AI in biotechnology are almost limitless, scientists, founders, and investors have focused on a few key use cases: breakthroughs and cancer treatments.

Already, companies using AI to target cancers have caught the attention of investors. Biotech startup HotSpot Therapeutics, for example, raised $ 100 million in its oversubscribed Series C funding round this year, money that will allow the startup to advance its AI-based technology that identifies and targets proteins. causing diseases in the body hitherto neglected so that the company can find the best way to treat the disease.

“What’s also very exciting for us is the mix of attention to healthcare companies and the tech industry,” HotSpot co-founder and CSO told Crunchbase News in a Geraldine Harriman. interview this year. “It’s having investors who are generally technology-driven investors who really see the value of this interface between technology and medicine. “

Gene editing and cell therapy

But once technology has enabled scientists to identify diseases like cancer or other chronic illnesses, the question of treatment inevitably comes next. That’s what Northpond Ventures director Adam Wieschhaus is most excited about in the New Year.

“From a public market perspective, some of the biggest IPOs (in 2021) were in gene editing and cell therapy,” he said in an interview. “These companies are making significant strides in advancing these new therapies for cancer, cardiovascular disease and other key areas of unmet need, and we believe these solutions will have lasting and long-term benefits in improving outcomes.” patient outcomes. “

He and Northpond Ventures, which focuses on cutting-edge science and technology startups, will monitor and invest in these types of technologies. This includes therapies aimed at “restoring a patient’s genome,” which can have implications for things like aging. The obstacles, said Wieschhaus, are in scale and distribution.

“One of the biggest challenges for any business doing this will be the ability to evolve its technologies,” he said. “We will need to focus more and more on how we can industrialize these processes to ensure that they can produce products that are available to all who need them. “

Mental Health

Mental health made its way to the forefront of public consciousness after people around the world spent nearly two years isolated from loved ones, worried about their jobs, their money and their illness. As a result, people are talking more openly about their depression, anxiety, trauma and other mental health issues that were once considered taboo.

This shift, coupled with relatively new technological advancements, such as wearable devices, brain imaging and targeted therapies, and even chatbots that can help sort out patients in crisis, makes the industry ripe for growth as it is trying to meet the new demand.

Employers are increasingly seeing the value of proactively helping workers solve their mental health issues, said Ryan Todd, CEO of Headversity, which offers mental health, safety and resilience training to businesses.

This awareness began to emerge among many business leaders before COVID, when a growing data mine began to emerge showing that mental health issues were contributing to more disability claims and conflict. at work or lost productivity, which meant less money for businesses. But the ripple effects have become more noticeable over the past year and a half, Todd said.

“We all felt isolated, we all felt heightened anxiety, and those with diagnosable mental health issues that got worse, that’s what we saw on the front lines,” said Todd, a psychiatrist. accredited, to Crunchbase News. “So this whole mental health issue has come to the fore on people’s desks. “


When COVID-19 hit the United States in early 2020, people flocked to hospitals in droves. Some went because they were sick with the coronavirus and needed help, others because they wanted reassurance that their cold was not the new virus, and some because they had to ‘other emergencies.

The cracks in the nation’s health care system appeared quickly, but few were as deep as the often manual and paper filing systems that slowed everything down, including billing.

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Before 2020, it was difficult for hospitals to raise money, bouncing between insurance companies and individual patients, who could often pay off their medical debts. After the pandemic, it became increasingly difficult to cope with the paperwork and raise money from a sick and often unemployed population.

A growing number of hospitals have started to turn to technology to solve filing and billing issues, and startups have started to deliver.

“Healthcare accounts for (almost) 20% of GDP and is relatively untouched by technology. “Financial services were the same way, and a lot of the money and attention went into it. “

One example is medical fintech startup PayZen, which raised $ 15 million in a Series A cycle this year to expand its “cure now, pay later” model in the United States. The company is creating a platform that helps calculate the cost of a person’s health care and their ability to pay those costs after insurance. Then it sets up a patient payment plan and automated system to help streamline the billing process for hospitals.

Meanwhile, Nomi Health wants to completely ignore insurance companies. The Utah-based direct healthcare startup offers employers a payment platform that connects directly to healthcare providers, which it says can save everyone money. The company launched in 2019 and closed a $ 110 million Series A funding round in December.

While the founders of PayZen and Nomi say their companies are quite unique in the market today and have seen tremendous growth in terms of adoption, number of employees and funding, they both expect more. competition in the future as the industry grows. Peechu is also optimistic about it.

“The global healthcare market is very rich and diverse,” he said. “The money is being invested both in traditional investments in life sciences and in all of these sub-sectors. “


The idea of ​​spitting into a tube, pricking your finger, or wrapping a stool sample for analysis is not a foreign concept in health care. But doing it all from home and paying a private company to analyze it is still a relatively new, but growing, part of the industry that investors like Peechu say are watching closely.

Viome, based in Bellevue, Wash., For example, raised $ 54 million last year to research aggressive cancers and chronic diseases and, ideally, provide early stage diagnostics and treatment for these diseases. But most people know the company for its home diagnostic kits that exchange a blood or stool sample for dietary recommendations and supplements, a service that has exploded during the pandemic.

“More and more people are more and more aware of their own health, and COVID, to some extent, has taught us that we really have a say in what happens to our health,” said the founder. and Viome CEO Naveen Jain at Crunchbase News in 2021. “Previously, it was ‘I do what I do and when I get sick I go to the hospital.’ COVID has taught us that the last thing I do is you want to do is get sick and go to the hospital. “

Illustration: Dom Guzman

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