In 2016 the term “unicorn”—a privately held company worth more than $1 billion—was already part of the tech lexicon. But applying that label to a European digital health company remains aspirational. In the United States, the Patient Protection and Affordable Care Act (PPACA) and broader reforms in the early 2010s created fertile ground for digital health startups: millions of newly insured consumers entered the market, risk shifted toward providers and payers, and employers began offering wellness programs. Venture capital flowed, valuations climbed and several digital health platforms now have household-name status.
Europe looks very different. Instead of one commercial market, there are dozens of national health systems. In Germany alone more than 100 statutory insurers compete; the United Kingdom has more than 200 clinical commissioning groups and trusts. Spending per person is much lower than in the U.S.—the U.S. spent around US$9,500 per capita on health care in 2015, while the U.K. spent about £2,259 and Germany €3,825—and the incentive to adopt consumer-oriented digital products is weaker because most care is publicly funded. Regulation is also fragmented: companies must navigate data protection rules, reimbursement codes and languages for every market they enter.
All of this fragmentation means that European digital health companies tend to focus on incremental innovation or niche markets. Rather than raise rounds approaching a billion-dollar valuation, many entrepreneurs aim for trade sales to global device or pharma companies. There have been notable acquisitions—fitness app Runtastic was sold to Adidas and French company Withings to Nokia—but none have crossed the unicorn threshold.
Europe could still produce global champions if attitudes change. A mindset shift towards cross-border scaling, bolder investment and pan-European platforms is needed; the discussion in our companion article on the need for Europe to
We also explore why saving lives is not enough in Europe’s digital health landscape; sustainable business models and cost savings are key.become a champion of health innovation provides further context. Without coordinated policy and capital, however, the continent will continue to see promising startups exit early rather than build the next unicorn.
He has invested in startups including American Well, Neuronation, Mimi, and most notably mySugr – which was recently acquired by Roche. Min-Sung is also a contributing writer for mediums including TechCrunch and Tech.EU and studied Business Economics at Witten/Herdecke, Harvard, St.Gallen, and in Seoul.