The digital health sector has grown significantly during the past decade. The investment by the global financial and corporate markets rose from $2 billion in 2011 to $44 billion in 2021. Moreover, tremendous investment poured into digital health in the shadow of the pandemic. However, in the past year, investors have been more selective in their decisions.
But total investment dollars in digital health took a steep dive in 2022; however, the picture looks significantly different on a region-to-region basis. While Asia-Pacific saw an investment decline in 2022, the Q4 trend shows a rebound worth watching and studying.
The Galen Growth experts pinpoint in a new phase of digital health investment. The shift from exuberant investment in 2020 and 2021, to a market shift that mirror previous years of strategic engagement. Private equity and business development dollars continue to flow toward the category however, directed toward specific therapeutic categories and technologies. Out of the total funding value deployed in 2022 for the region, research solutions and online marketplace clusters captured 49% of total funds invested and, oncology and cardiovascular diseases were the most invested therapeutic areas. Often public reports tend to cherry-pick data. However, the Galen/FINN “Digital Health Ecosystem – Asia Pacific Report” shows verified trends such as:
- Venture capital funding in Asia Pacific’s digital health industry decreased during the first three quarters of 2022 but bounced back in Q4 ending the year at $5.79B, with a YoY decrease of 41% from 2021.
- Venture funding deceleration was largely due to China’s investment falling by 66% YoY – the lowest since 2017, amidst strict pandemic regulations. However, Northeast Asia’s funding doubled to $1.9B, surpassing China and South Asia, which dropped by 30% compared to 2021.
- Asia Pacific saw a 33% YoY decrease in M&A activity, but digital health ventures accounted for 60% of global acquisitions, driving industry consolidation. The slowdown in venture funding has fueled acquisitions, with only 34% of Growth Stage ventures in Asia Pacific able to raise capital over the past 18 months.
- In 2023, digital health ventures faced challenges due to declining venture valuations. However, the industry’s resilience in 2022 will strengthen the venture pipeline, driving innovation and business model viability to show the value of digital health tools in improving healthcare research and delivery.
The report draws inputs from 250 million data points and more than 14,000 digital health ventures. It will be released at the March Asia Leadership Meet Summit in Singapore. With this partnership, experts from the FINN Global Digital Health Group are working with Galen Growth data and research professionals to chart the complex and often fragmented digital health landscape, emerging market trends, areas of growth and innovation, and look beyond equity funding to explore what’s expected to happen in this fast-paced sector. The combined team will look beyond the ‘hype‘ of digital to map the priority and practical opportunities for decision-makers.
“With the slowdown of venture funding in 2022, digital health is anchoring back to reality, becoming more focused, and demanding more verification that ventures are offering solutions that will bring value to the digital health ecosystem,” said Julien de Salaberry CEO and Galen Growth co-founder. “This joint report with FINN Partners will explore how ventures are meeting those challenges and preparing to show evidence to demonstrate the effectiveness of their solutions.”
FINN digital health leaders lent their perspective, analysis, and guidance to supplement the data and insights developed by the Galen Growth team to help guide stakeholders as they navigate and engage with the digital health landscape.
“Compared to the pre-pandemic levels, digital health has shown clear signs of resilience with the Asia Pacific region witnessing an increase in funding,” said Aman Gupta, Managing Partner, Health Practice Lead at SPAG – A Finn Partners company. “An in-depth evaluation of this market is important as globally 27% of digital health ventures were founded in Asia Pacific, making it the second largest ecosystem. The Galen Growth 2022 Year End Digital Health Ecosystem Report, in partnership with FINN, aims to present a comprehensive overview of the market to allow various stakeholders to make informed decisions towards improving patient outcomes.”
“FINN Partners is thrilled to partner with Galen Growth to take a deeper look at the Digital Health landscape,” said Ritesh Patel, Senior Partner, Global Digital Health Lead at FINN Partners. “The rapidly expanding digital health ecosystem in Asia must be leveraged to improve patient outcomes. This series of studies will help inform the choices providers, payers, product innovators and patients will need to make in the coming years.”
“After years of development, China’s digital healthcare sector is embracing new types of high-quality innovation, supporting overall medical reform. In 2021, China’s digital healthcare market surged 79.5 percent yearly to 28.9 billion yuan ($4.1 billion). Now, China’s digital health ecosystem needs to draw upon insights from the globe and region to navigate the complexity of its continued healthy development,” said Jason Cao, Senior Partner FINN Partners, China. “The Galen Growth/FINN Partnership provides investors and startups in China a vital perspective that will guide these next steps.”
About Galen Growth
Founded in 2016, Galen Growth partners leading companies for their digital health market intel and insights needs. With comprehensive data, empirical research and expert insights, the company helps global organizations reach the optimal solutions for their business transformation, discover the latest trends in digital health and strengthen their innovative know-how. HealthTech Alpha, Galen Growth’s proprietary platform, is the world’s leading digital health private market platform, powering how leaders and corporations make digital health decisions.
Headquartered in Singapore, Galen Growth has offices in Basel (Switzerland), Boston and Chicago.
Please find us at galengrowth.com and follow us on Twitter at @galengrowth and https://www.linkedin.com/company/galen-growth/.
About FINN Partners, Inc.
Founded in 2011 on the core principles of innovation and collaborative partnership, FINN Partners has grown from about $24 million in fees to almost $200 million in the past 10 years, becoming one of the fastest-growing independent public relations agencies in the world. It has been recognized as a PRovoke Media 2022 Agency of the Year. The full-service marketing and communications company’s record-setting pace results from organic growth and integrating new companies and new people into the FINN world through a common philosophy. With more than 1,300 professionals across 33 offices, FINN provides clients with global access and capabilities in the Americas, Europe, and Asia. In addition, FINN provides its clients with access to top-tier agencies worldwide through its membership in the global network PROI.
Headquartered in New York, FINN has offices in: Atlanta, Bangalore, Beijing, Boston, Chicago, Delhi, Denver, Detroit, Dublin, Fort Lauderdale, Frankfurt, Guam, Hong Kong, Honolulu, Jerusalem, Kuala Lumpur, London, Los Angeles, Manila, Mumbai, Munich, Nashville, Orange County, Paris, Portland, San Diego, San Francisco, Seattle, Shanghai, Singapore, Vancouver and Washington D.C. Find us at finnpartners.com and follow us on Twitter and Instagram at @finnpartners.
SPAG/FINN is a health marketing and communications powerhouse with 10+ offices, 175+ professionals, and full-stack service offerings in Asia-Pacific. Renowned in the APAC region as well as globally, SPAG/FINN has been named as a Health Communications Agency of the Year for Asia-Pacific in 2017 and 2019, and as a top Large Agency in the region in 2021 and 2022.
The firm is renowned for offering bespoke communication strategies to shape conversations, influence perceptions, cultivate constructive knowledge, and keep the dialogue going. As an integrated communications entity, SPAG/FINN harnesses the potential of a phenomenally diverse universe of conversations to shape the narrative for a better world.
SPAG/FINN has offices in Singapore, Malaysia, Philippines, Shanghai, Beijing, Hong Kong, Indonesia, Thailand, Delhi, Mumbai and Bangalore.
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