Dear fellow digital health enthusiasts,
As usual, your dose of digital health on Wednesday.
Is Sleep an attractive investment area? Apple acquired the sleep tracker company Beddit in 2017. Some people believe it is a lucrative area, since one can target health conscious buyers and target people who are willing to pay premiums to improve their sleep. Now, PokemonGo, arguable one of the most successful health games in digital health (you walk. a lot), enters the market with PokemonSleep. It records your sleeping patterns and requires external hardware beside your smartphone. In theory, it’s an interesting tool to collect sleep data. The specific game dynamics are still unclear. It would allow to connect exercise data (PokemonGo) with sleep data (PokemonSleep). [≈ 4min]
Are we in a digital health bubble? Rock Health addresses this question in its 2019 midyear digital health market update (spoiler alert: their answer is no). A lengthy (& worthwhile) read, it provides a data-driven analysis of the digital health investment and exit market.
We’re especially intrigued with one KPI: Net Liquidity Overhang (NLO), a score that measures the amount of capital invested, «still in the game» and awaiting a liquidity event:
NLO= total dollars invested – investments made in companies that already exited
Summarized quickly, between 2011 and 2019, USD 36.3bn was invested in 1,274 start-ups. Start-ups, that accounted for USD 6.9bn investment, exited the market in the same time frame. To put things in perspective though, two important metrics are missing: total exit value in dollars and time to exit. Exit dollars would give a better sense of digital health’s return; it’s a huge difference if 170 companies were acquired for a total of USD 5bn, or USD 50bn. [≈ 11min]
Closing as always with the quote of the week: «To get 10,000 people enrolled in a medical study normally, it would take a year» Alan Yeung, medical director of Stanford Cardiovascular Health after Apple enrolled 11,000 people in a heart study in one day.
Not happy with our selection? Please send us links that you find interesting.
Have a productive week,