ROI and Clinical Validation Will Determine Digital Health Startups’ Success in 2023, Investors Say

Going into 2023, investors think the abilities to demonstrate ROI and clinical validation will be the most important factors determining digital health companies’ success, according to a new report. While the ROI factor is a given, clinical validation “is the best signal of patient value and historically has been under-captured in digital health,” said Sunny Kumar, a partner at GSR Ventures.

Going into 2023, investors think the abilities to demonstrate a measurable return on investment and prove technology’s clinical validation will be the most important factors determining the success of digital health companies, according to a recent report from GSR Ventures.

For the report, GSR gathered information from more than 50 digital health venture capital investors. A full 94% of respondents said that ROI was “important” or “very important” to company success, and 79% said the same for clinical evidence and trials.

The ability to demonstrate ROI has always been important for digital health startups, but it has become even more crucial amid a changing economic landscape in which investors are guarding their capital more closely.

In the third quarter of this year, digital health companies garnered the lowest quarterly funding total in the past 11 quarters. The sector raised $4.6 billion in the third quarter — this represented a 36% quarter-over-quarter drop and a 72% drop from its all-time high of $16.8 billion in the second quarter of 2021.

While the ROI factor is a given, it’s a bit more compelling that investors cited clinical validation as a major driver of company success in 2023, according to Sunny Kumar, a partner at GSR. In a statement, he said clinical validation “is the best signal of patient value and historically has been under-captured in digital health.”

Ian Wijaya, managing director at investment bank Lazard, told MedCity News in October that at the pace investment has been going this year, it’s doubtful that 2023’s digital health fundraising amount will reach even half of last year’s $29.2 billion total.

By Katie Adams | MedCity News

Image Credit: oatawa / Getty Images

READ MORE

About Peter Coffaro 510 Articles
Peter Coffaro is a growth-driven and strategic executive with over 25 years of progressive management success in the medical device industry. With a proven track record and recognized expertise, Peter has established himself as one of the top influencers in medical sales, as acknowledged by prestigious publications such as the World Journal of Orthopedics, Exponential Healthtech, and MedReps.com. Throughout his career, Peter has accumulated 10 years of combined sales management experience, excelling in various roles including Director, General Manager, Distributor, and Vice President. He has worked for industry-leading orthopedic companies such as Zimmer, DePuy, and Stryker, solidifying his deep knowledge and network within the field. Peter’s passion for innovation and emerging technologies led him to found OrthoFeed, an award-winning blog covering digital orthopedic news and emerging medical technologies. Through this platform, he stays at the forefront of the industry and contributes to the dissemination of valuable insights. Peter is a three-time Hall of Fame award winner at Johnson and Johnson, demonstrating his exceptional contributions and impact on the organization. His expertise extends to areas such as organizational development, business development, sales management, digital marketing, and professional education. Peter earned a B.S. degree in Biology and Chemistry from Northern Illinois University, further complementing his comprehensive understanding of the medical field. With his wealth of experience, strategic mindset, and dedication to advancing healthcare, Peter Coffaro is a valuable asset and leader in the medical device industry.

Be the first to comment

Leave a Reply

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.