healthtech

In recent months we have seen healthcare systems in many parts of the developing world coming under immense pressure as they struggle to control the spread of COVID-19.

However, even before the current novel coronavirus pandemic, existing brick-and-mortar healthcare systems in much of Asia were struggling to cope with demand from ageing and increasingly health-conscious populations.

As we look ahead into the new decade, we can confidently predict that new digital technologies will transform the healthcare industry-disrupting traditional business models, enabling a more preventative approach and bridging the infrastructure gap by enabling people to see their doctor from the relative comfort of their own home.

Digital technology in healthcare

In most parts of Asia, digital technology is shaping the region’s healthcare industry through – what can best be described as – a digital revolution. It’s a revolution because it is being led not by large companies or government, but from the bottom up, by the region’s entrepreneurs who have founded a wave of innovative digital health startups.

In Singapore, the government’s commitment to digital innovation and adoption, coupled with strong internet connectivity and high mobile and smartphone penetration has given our digital entrepreneurs a significant headstart in comparison to those from other parts of Asia.

In January 2020, Singapore Parliament passed the Healthcare Services Bill giving authorities the ability to license, and therefore implement, new models of healthcare such as telemedicine. This follows other pioneering initiatives such as the Ministry of Health’s creation of a “regulatory sandbox” – the Licensing Experimentation and Adaptation Programme – and a strong framework of supporting guidelines such as the National Telemedicine Guidelines and Singapore Medical Council’s Ethical Code and Ethical Guidelines within which innovation has been allowed to thrive.

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Singapore is ASEAN’s sandbox for digital innovation

Singapore is estimated to be home to around nine per cent of Asia’s healthtech startups, the largest number after China and India. The growth of the sector in Singapore has also been impressive with the number of startups rising from 45 in 2012 to 174 in 2018, and the proportion of those raising Series A and B funding rounds increasing steadily as the sector has matured.

Furthermore, Singapore’s start-ups are among the most innovative in the region and are often developing healthcare solutions that address the unique needs of Asian people.

From using blockchain to improve the certification of halal products, to applying artificial intelligence to diagnose and manage diabetes, or digital platforms, apps and wearable devices using local languages to help people in traditionally underserved rural communities manage their health and wellbeing.

However, no matter how innovative an entrepreneur is, they are unlikely to successfully commercialise their product without money. Raising investment is extremely hard for any start-up and this can be compounded by the complexity of the healthcare sector.

Yet for experienced and skilful investors willing to consider smaller deal sizes, early-stage digital health companies can offer the potential for high-multiples and this has been recognised by Singapore’s investment community.

In 2018, Singapore attracted US$105 million into its health-tech startups, or 24 per cent of total investment, excluding China and India. Big names such as Sequoia Capital, MassMutual Ventures SEA, Heritas Venture Fund, Venturecraft, and Wavemaker Partners have all begun to make significant plays.

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Singapore’s public healthcare system has also stepped-up and is pioneering the use of innovative patient-centric digital solutions through partnerships with the private sector. For example, the Singapore startup Holmusk recently announced a partnership with National Heart Centre Singapore to use its machine learning and data analytics technologies to improve care for patients with coronary artery disease.

Over the last 12-months many of Singapore’s largest public health groups, such as SingHealth and National Health Group, have been involved in similar private-sector collaborations.

To complete Singapore’s digital health ecosystem, our large healthcare companies need to be willing to take risks and act more like the tech giants of Silicon-Valley by supporting digital entrepreneurs through partnerships, licensing deals, and even seed investments.

Some large multinationals, such as Johnson & Johnson and Novartis, have been quick to recognise the innovation emerging from Singapore and inked partnership deals with our leading health-tech startups, such as Bioformis – the developer of software-based therapeutics to treat heart and lung diseases – and Ark Bio Holding – the medtech enterprise focused on early cancer detection.

But challenges remain…

Yet even in Singapore challenges remain, and entrepreneurs must carefully consider the best commercialisation pathway to bring their new digital healthcare product or service to market.

Firstly, they must devise a viable revenue model that answers the key questions of ‘who will pay’ and ‘how will they pay’, not just in their home territory of Singapore, but across the region’s different healthcare systems if they are to scale. These revenue models can be broadly categorised as B2C or B2B.

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Startups such as Homage – the developer of a digital platform that matches caregivers with those needing home-care support – provides its product directly to the elderly and their families. While others, like Bioformis, offer their innovation to pharmaceutical companies or healthcare providers that apply the technology and use it with their own customers or patients.

Secondly, each healthcare market in Asia is at a different stage of development, each with its own regulatory systems governing data privacy and cybersecurity. For a Singapore startup, navigating this complex web of rules and regulation requires a significant investment of money and time and is enough to give an entrepreneur a headache, one that needs its own healthcare innovation to cure.

In early 2019, Homage raised a double-digit Series B equity financing round led by EV Growth to fund the expansion of its caregiving service into other parts of Southeast Asia. Homage has expanded successfully and today offers a network of more than 1,000 professional caregivers in Singapore and Malaysia.

Other companies, typically those applying a B2B model, have chosen to partner with a local player or a large multinational already familiar with the eccentricities of different Asian markets to ease their expansion. For example, in November 2019 Bioformis announced a partnership with Novartis to apply its digital therapeutics to treat patients recovering from heart failure in six countries across Southeast Asia, rapidly scaling the start-up’s exposure to patients across the region.

Collaboration is key

Singapore is home to a vibrant and talented community of entrepreneurs building successful and innovative digital healthcare businesses that are among the best in the business. Their innovations offer the potential to transform Asia’s brick and mortar healthcare systems and in so doing improve the health of thousands of Singaporeans and millions across Asia.

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However, for these businesses to thrive, Singapore must support its start-ups by fostering a symbiotic digital healthcare ecosystem.

It is now time for all industry stakeholders – including large healthcare companies, investors and the public healthcare system, to get behind Singapore’s digital entrepreneurs and, in so doing, help to ensure the country retains its position at the forefront Asia’s health-tech transformation.

The views expressed herein are those of the author and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.

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