As venture investors, my colleague Adam Seabrook and I look for frontier technologies that advance the practice of healthcare. One promising trend is the use of virtual reality to redefine the patient and provider experience. This is our perspective.
Two high-growth, multi-billion dollar industries are colliding
Investment in digital health has surged in recent years, spurred by regulatory tailwinds that have forced payers, providers, and suppliers to rethink reimbursement and care delivery. MobiHealth News reported that almost $224M was raised by digital health startups in August of this year, and according to Rock Health, the first six months of 2016 saw $2B raised, on pace to match the record setting years of 2014 and 2015. Digital health has grown from less than 4% of all venture funding in 2011 to more than 8%.
Concurrently, over $1.7B was invested in virtual and augmented reality startups in the 12 months leading up to May 2016, according to Digi-Capital. Forecasts predict that 6-7M VR headsets will be distributed this year. While many developers are focusing on gaming and entertainment, the sheer magnitude of spend in the US healthcare system – $3.0 trillion and nearly 20% of US GDP, and the potential impact that VR can have on managing cost, improving quality, and enhancing the patient experience, set the stage for an interesting intersection.
Early market watchers predict that VR in healthcare will be a $2.5B market by 2020.
By Gavin Teo | B Capital Group