Early Stage Life Sciences and Healthcare in Europe

The European investment ecosystem is thriving more than ever. The challenges highlighted by lockdowns led to a flourishing of innovation and of sources of funding for our ecosystems.

The European ecosystem is deployed in the past 12 months over $1.3bn invested in early-stage life sciences and healthcare.

European Startups

The life sciences and healthcare space has been moving from stride to stride in the upward direction, and it is predicted to be bigger than ever. It is fueled by the institutional capital able to be deployed in VC funds. Healthcare is at the top of the agenda for every state, every local authority and every healthcare provider whether private or public.

While 2020 has been a record year, the $17bn raised by funds last year will have to be channelled into new emerging technologies and solutions.

Data Source: Pitchbook 2020–2021

Unlike other major jurisdictions such as the US or China, I am observing a split focus between Health Tech, Biopharma and Device (mainly focusing on Surgical and therapeutical uses). Less of a focus on Diagnostic Tools or technologies.

Data Source: Pitchbook 2020–2021, personalised classification

A major question to be asked is what Digital Health in Europe going to look like in a few years based on what we are investing in today.

Across Europe we over 1200 rounds at Pre-Seed, Seed, and Early VC (pre-Series A). It has been on an upward trajectory for a number of years.

Two major areas of focus for our ecosystems

  1. Technologies focusing mostly on clinical decisions. These are AI / Ml applications (distinguishing from diagnostics) mean to help the digitalisation of doctor/clinician-patient relationship for various indications. Unlike the US we do not have any hybrid virtual and in-person providers. Across the 130 rounds observed, there is a major focus on optimising the experience of patients with chronic affections.

2. Another area of focus for Europe is on Provider solutions. These are known as Outcome Management Systems or B2B SaaS applications for hospitals and clinics. Most of the companies in the early stage are trying to breaking data silos, de-risking the healthcare pathway for the patient with multiple indications, and support the major work on identifying care gaps.

We all know that the European landscape is a lot more fragmented, with different approaches, and way of funding healthcare delivery. Every ecosystem has its emerging technologies, but it is still unclear if scalability can be achieved for the Provider Solutions across Europe.

There are many other verticals in Digital Health that are work considering as they are attracting a good chunk of capital:

  • Educational purposes
  • Elderly and senior care delivery digitalisation
  • Mental health
  • Femtech — women health applications

What can we say about the Investors in the European Ecosystem?

The inflow of non-Life Sciences & Healthtech investors is the new normal. Many new fund vehicles, new specialised teams in place. The list includes Cherry, Local Globe, 24 Haymarket, Seedcamp, Speedinvest, Ascension, Fuel, Octopus.

In Europe, an important role is played by pseudo-state agencies and organisations funding or investing (equity, debt) in early-stage innovation. It includes Innovate UK, Horizon 2020 (EU), Scottish Enterprise EIT Health (EU), Ireland Development Bank of Wales.

An estimated 20% of companies raising have some contributions from such organisations. It is remarkable how the UK and EU bodies have stepped in to support the earliest stages with a grant and funding mechanism that actually works. It catalyses the ecosystem, de-risks the propositions for private investors or funds, and generally removes barriers.

Committed to supporting early stage and growth companies

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