Europe’s health-tech startups are continuing to show strong potential as venture capitalists (VCs) pour billions of dollars into the sector. In 2021, VCs invested $25.1 billion into health and biotech startups, driven by COVID-19. Despite experiencing a slowdown, the health-tech sector is faring better than fintech and climate, and many investors are predicting strong growth for health startups in the years to come.
At the recent Bits&Pretzels Healthtech in Munich, investors, founders, and operators from across Europe gathered to discuss trends and predictions for health-tech startups. One key area of focus was techbio, which brings technology and biology together to streamline processes such as drug discovery and data collection in trials. While funding into drug discovery startups has stalled this year at just $126 million, VCs see potential in well-calculated bets on certain drug discovery startups to generate lucrative returns, especially through collaborations with large pharmaceutical companies.
AI also has the potential to transform healthcare, especially in administrative tasks and diagnostics, but many investors are aware of the need for stringent regulation given the potential for misuse of confidential patient data. Another area gaining traction is the monetization of clinical data, which startups are tapping into to fill a gap in data acquisition by pharma companies.
Health-tech startups still lag behind fintech and software-as-a-service, but early-stage healthtech startups are leading the race, receiving $550 million in funding so far this year. Healthtech VCs are standing by their prudent approach amid a tumultuous tech market, but startups in the space are promising strong growth and returns in the years to come.
