How to get started

Written By LILLIAN AYLA ERSOY

In recent years, the health sector in general has shown stable and consistent investment growth, and was further accelerated by COVID-19. The pandemic galvanized the industry and accelerated the speed, acceptance levels and expectations of patients, clinicians, and governments the world over – and as a result, a significant increase in attention and capital from investors (Refer SVB Healthcare Report 2022, VC Dollars and Deals by Healthcare Sectors - Page 7). 

Key takeaways from SVB Report on VC Dollars and Deals (EU & US) :

  • “Overall healthcare investment (Biopharma, HealthTech, Digital Therapeutics & Devices) more than doubled every 2 years since 2017, from $16B to $34B to $86B in 2021.”

  • “All 4 sectors have shown record investments in 2021 with healthtech up 157% from 2020”

  • “Device, led by a 3x increase in European investment, was up 53%” 

Pre-existing global forces such as rapid and abundant technological improvements, access to big data, and consumer empowerment create a unique scenario and a rare opportunity for rapid growth and value creation. Couple that with health-specific industry drivers such as; major advances in medical science, an aging population, increased prevalence and global reach of disease, and the personalized medicine movement, and you have a good starting point for the argument to invest in health.

Stimulated by the pandemic, many investors who have traditionally invested in other sectors are now directing capital towards health. There is however an unseen and often unspoken cloud hovering over health investing, and curious but not yet committed investors have the feeling you need to be a MD/PhD in order to invest. With this resource, we are aiming to dispel that myth.

As you will hear from the multiple contributors here, investing in any venture comes with inherent risks and the health sector is no different. However, you do not need to be Bill Gates, Dr. Fauci or Norway’s Camilla Stoltenberg to get started, and there are some simple ways to understand health investing and de-risk your investment without the need for a medical degree. To assist and inform interested investors, we have provided some helpful tools, definitions and links you can use as resources.

Main sub-sectors of health investing?

Though the definitions and company categorisation are often debated around the water-cooler, the below should provide a brief overview;

Health-tech/Digital-health: ‘Includes any technology-enabled healthcare product and service that can be delivered or consumed outside of a hospital or physician’s office—one notable exception being hospital and practice management software.’ (Pitchbook, 2021) Health-tech is more focused on assisting patients with prevention and monitoring of disease, rather than treatment.

Med-tech: Focuses on therapeutic technologies and medical devices that treat existing medical issues and diagnostic technologies that detect medical conditions (i.e. in-hospital care). (Pitchbook, 2021) Med-tech can include equipment, devices, machines, software and other tools. As they may directly affect a patient's health, they have a more regulated path to market.

Phamaceuticals/Biotech: Biotechnology and pharmaceutical companies both produce medicines. Medicines made by biotechnology companies are derived from living organisms while those made by pharmaceutical companies generally have a chemical basis. (Investopedia, 2021)

Deal sourcing?

A good way to understand what a ‘quality investment’ looks like, is to dive in and begin talking to, assessing and comparing companies. Below we have provided a selection of sources (non-exhaustive) of where to find health-related investment opportunities within Norway. 

Norwegian Health Investor Network (Consolidation of health-focused deals from Norway)

Health-focused clusters: (Health-centric member organisations)

Health-incubators / accelerators:


Oslo Business Region Deal room (Dedicated startup database, mapping Oslo’s startup and venture capital ecosystem)

HealthTech Nordic - “the largest community for healthtech companies in the Nordics.”

(Here we have provided some expert opinions on the high-level considerations of professional investors, as well as a due diligence checklist to use as a starting point for assessing health companies.)

Follow the leader…

One of the best ways to learn about health investing is to read about the sector and talk to those who are already investing in it. A good way to do that is to join groups of investors, such as an investor or angel network. This could also open the door do joining an investment syndicate which is a great way to reduce risk and increase knowledge as a new investor to the space. There are many opportunities to follow experienced investors in this way but it can take time to develop relationships and build mutual trust. 


Some organisations where you could connect with other investors in Norway are:


Conferences can also be helpful networking opportunities. Some examples are:

Some resources to learn about news from the sector (non-exhaustive):



Contribution by

Jeremy McCrohan, Norwegian Health Investor Network



LILLIAN AYLA ERSOY
Previous

Five key questions investors should ask
Next

A three step guide to life science investing