Amidst a modest funding landscape for Australian start-ups and SMEs, recent trends suggest a healthy appetite for innovations in health emerging from the initial two years of the COVID-19 pandemic, in developments that could prove insightful for retailers hoping to cut through in a strained economic climate.
Despite starting the year strongly, funding contributions to Australian start-ups and SMEs have seen a significant cold period across the last five months, declining from a monthly average of $1.04 billion across the first three months of the year to average only $312 million over the five months since, according to data from Cut Through Venture.
Recent trends of funding successes despite the climate, however, suggest a strong appetite from investors for innovations in health services and health technology.
In early August, healthtech startup InstantScripts saw a $5 million funding boost resulting in a reported 10 percent increase in the company’s valuation. Designed as a healthcare platform to enable Australians to better access convenient and affordable healthcare services, the funding boost follows the platform’s reported revenue in FY21 exceeding $7 million and ultimately achieving a 1441 percent increase from revenue results for the fiscal year only two years previous.
More recently, healthtech startups Envirma and Healthmatch saw funding round successes of $3 million and $10 million respectively. Both are digital platforms designed to enable easier access to clinical trials for patients and doctors, with the global user base for Healthmatch particularly having now exceeded 1 million users. Most successful of all to recently take advantage of these funding trends was health and wellbeing tech start-up Sonder, which closed its Series B funding round with $35 million. The startup oversees a platform designed for businesses and professional organisations to more effectively manage and address employee safety and wellbeing, with the startup’s clients now boasting the inclusion of all Australian properties overseen by retail giant Woolworths.
The trends demonstrating strong appetites for innovations and opportunities in health services and health technology have already seen developments in the area of e-commerce abroad. In late July, e-commerce monolith Amazon announced its plans to acquire US primary care company OneMedical in its latest foray into the healthcare sector. It comes following Amazon’s 2018 acquisition of online pharmacy Pillpack, then formally signaling the Jeff Bezos brainchild’s plans to expand into the healthcare market.
The cost of Amazon’s Pillpack acquisition was reportedly in the area of US$750 million, a significant amount less than the amount that the OneMedical acquisition is reportedly going to cost the e-commerce retailer, with that purchase cost expected to be as high as almost US$4 billion. That deal is currently being held up pending an investigation by the United States’ Federal Trade Commission of the planned acquisition.
Learning from these developments, however, and observing trends of appetites for innovations in the health sector could be viewed as an area of possible interest for retailers in the months ahead, as a means of potentially maintaining or boosting revenue through the period of an economic downturn.
With the economic climate already experiencing considerable strains, and turbulence predicted to continue or even worsen over coming months, the market for healthcare provisions and services is one of few markets expected to remain steady – something investors and entrepreneurs have clearly already begun to identify.
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