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Bad News On The Horizon For Digital Health? Galen Growth Releases Its Asia Pacific HealthTech Investment Landscape – Half Year 2020 Report

Bad News On The Horizon For Digital Health? Galen Growth Releases Its Asia Pacific HealthTech Investment Landscape – Half Year 2020 Report

The Half Year 2020 report revealed a slump in investments across China and Southeast Asia, while India and Northeast Asia marched on.

SINGAPORE, 8th July 2020 – Galen Growth, the global leader in digital health intelligence, analytics and matchmaking, has just launched its Asia Pacific HealthTech Investment Landscape – Half Year 2020 report. The report is the 7th edition of the bi-annual go-to-reference for ecosystem key trends and insights for investors, corporations and digital health ventures.

“As we publish this report, the world is experiencing a global health crisis with more than 500,000 deaths due to COVID-19. In these extraordinary times in an epidemiological situation, we saw digital health being the vector of change for health systems across the world.  The Asia Pacific region was the first to be impacted and to implement lockdowns to protect populations and shield struggling health systems. However, economies may sink into recession as a result,” said Julien de Salaberry, CEO and Founder of Galen Growth.

“These unprecedented decisions have manifested themselves in the HealthTech ecosystem. COVID-19 is proven to be a real stress test for healthcare systems across the world and digital health investments in Asia”, he added.

The report reveals a substantial loss of investment momentum in the Asia Pacific HealthTech investment landscape for H1 2020. Despite a push in adoption of digital health solutions to combat the COVID-19 pandemic, the ecosystem saw investments fall to roughly US$1.9B across 171 deals, approximately half of H1 2019.

Asia Pacific HealthTech Investment Landscape – What Happened?

The Asia Pacific region was heavily impacted by the pandemic as early as January, resulting in unforeseen government measures to mitigate the crisis. These measures have frightened investors from committing to investments and corporates from finalising deals. Numbers from the report shows that Q1 2020 closed at US$761M, versus $1.60B in Q1 2019, and is the lowest recorded since 2016. Q2 2020 bounced back, recording US$1.1B, but it is still shadowed by Q2 2019 with $1.85B recorded. Deal volume and deal size have also dipped, with Late stage deals as the sole silver lining in the storm as it captured US$600M, a 22% increase from H1 2019. These numbers, while low, were expected as global markets and investment levels are also at a record low.

HealthTech Investments in China and Southeast Asia Take A Hit

For HealthTech Investments in China, investors were not only spooked by the US-China geopolitical headwinds but also by the pandemic. As a result, investments in venture-capital-backed ventures in China shrunk 57% in H1 2020 YoY. A similar drop is seen in Southeast Asia, with Singapore recording all significant deals in the half-year.

HealthTech In India And Northeast Asia Unaffected?

With what is seemingly odd, is that the HealthTech investment ecosystems in India and Northeast Asia have sailed through the pandemic unscathed so far. India’s relentless 2019 momentum continued to charge forward as the country saw its largest first-half funding on record, closing at US$362M, driven by a growing deal volume. While not as dramatic, Northeast Asia’s total funding in digital health jumped to US$240M, up 33% from H1 2019.

Medical Diagnostics Top For Most Attractive Categories

The most attractive categories for the half-year were reflective of the current pain points experienced by health systems today. Medical Diagnostics maintained its pole position as the most attractive category, with Wellness, Patient Solutions, Telemedicine and InsurTech forming the rest of the top 5. It is also important to note that Telemedicine recorded a funding variance of 22x YoY, the largest YoY funding total increase for this half.

Infectious Diseases Is The New Kid On The Block

Likewise, the pandemic in H1 2020 led Infectious Diseases to the top 5 of specific diseases that are attracting the most investment dollars, knocking Mental Health out. Oncology, Diabetes and Cardiovascular maintain their top 3 positions, with Neurology at fifth. Looking forward to H2 2020 and beyond, Galen Growth expects Mental Health to rebound back into the top 5 as the effects of the pandemic and lockdowns on society are heightened.

China And Japan Were Busy Building Partnerships

Pharmaceutical companies and insurers were the most active builders of partnerships, accounting for over 25% of the total partnership deals in H1 2020. While most of the focus remained on China, Galen Growth noted that Japan was home to an impressive number of primarily domestic partnership deals, focussed mostly on Medical Diagnosis, Online Marketplaces and Medical Education.

Industry And Investor Sentiment For HealthTech In The Asia Pacific Remains Upbeat

The report further revealed that investors across the region have chosen to prioritise their existing portfolios. On the other hand, many corporate leaders have set digital health as a high priority and are interested in further building partnerships. Nonetheless, the majority have affirmed their intention to make investments in HealthTech solutions in the region as they expect stronger momentum in H2 2020.

H1 2020 HealthTech Investment Landscape In A Nutshell, And Expectations For H2 2020.

While the numbers and dollars may signal a struggling ecosystem, the Asia Pacific HealthTech ecosystem remains highly resilient. Stakeholders across the landscape expect the ecosystem to rebound back in H2 2020 as payors, manufacturers and health system leaders seek to expedite solving the many pain points highlighted by the pandemic.

“Even as investment dollars and deals are slowing down, the innovation and passion within the ecosystem have not. Interest in HealthTech has never been stronger. Many large corporations have attested that HealthTech is a high priority, and our corporate partners are additionally continuing to put their innovation programmes as a priority. Many of us in the HealthTech space are expecting a lot of deals and partnerships in the coming months ahead,” said Julien de Salaberry.

About HealthTech Alpha

The comprehensive report is powered by HealthTech Alpha, a Galen Growth solution, the most advanced digital health intelligence platform. Galen Growth recently launched its global digital health ecosystems coverage through its HealthTech Alpha platform, which offers an unparalleled experience to its partners, ranging from corporates, investors and startups.

By leveraging the power of HealthTech Alpha’s 6,300+ digital health startups and over seventy million data points, industry leaders and investors now have, at their fingertips, the ability to navigate the thriving and dynamic global digital health ecosystems enabling them to compare venture from different markets to identify those best-suited to accelerate the deployment of their strategies.

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About Galen Growth

Galen Growth is the global leader in digital health intelligence, analytics and matchmaking, empowering global Fortune 500 companies and institutional investors to fast track their growth strategies.

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To get a copy of the full report, click here
To get a copy of the complimentary report, click here

Contact: Helene Champoux

© 2023 Galen Growth Asia Pte Ltd. All Rights Reserved.

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