Statistics say that the largest number of startups appears in the financial sector of business, second place belongs to e-commerce, and healthcare is only in third place. And yet, experts are confident that today the most success can be achieved precisely by finding solutions for healthcare challenges.
The global HealthTech market size is expected to reach $511.06 billion by 2026, growing at a compound annual growth rate (CAGR) of 25.6% from 2021 to 2026, according to a report by MarketsandMarkets.
The challenges facing healthcare organizations today include rising costs, workforce shortages, and the need to adopt innovative technologies. At least, this is the reason why investors are so interested in new prepositions in the health market. The eventual success is influenced by HealthTech startups issues, so explore the major obstacles currently encountered by these companies.
B-Series Funding as the Next Step for a Startup
Get the next level of funding is a key task for HealthTech startups. Many beginners usually wonder what is series B funding for startups mean. Well, basically it is an opportunity to get more money for developing innovative product and ensure the stable growth for the company. It is clear for experienced financial consultants how does funding work for startups in any sphere of business. However, there are some unique differences that HealthTech Startups meet on the way to gain investors.
Ensure stable growth
To be honest, funding levels for startups is not a new system and every small company faces this problem after receiving the first series of investments. Money raised on different platforms, like Crowdfunding, is usually enough to develop a fully-functional prototype, build and add strategy and implement only the first part of the business plan of a startup. To ensure stable growth and show to other investors the attractiveness and reliability of the offered idea and the whole company, in particular, it is important to solve HealthTech startup issues.
Series B rounds are all about taking businesses to the next level, past the development stage. Investors help startups get there by expanding market reach. Building a winning product and growing a team requires quality talent acquisition. Bulking up on business development, sales, advertising, tech, support, and employees costs a firm a lot of money. And this is where the startup should find more investors specialized in later stage investing.
The HealthTech technology designed in close collaboration with doctors has more chances for success due to its relevance. Рowever, it cannot be used as the only trump card in the sleeve when it comes to a new product. The constant appearance and growth of competitors should serve as an incentive for the further development and improvement of the company’s business strategy.
Implement the product (convince in its effectiveness)
It is also important to know how is healthcare funded in the private sector work. In order to get the next level funding HealthTech startup should prove that industry or a certain category of hospitals need the product, it offers to the market.
One of the main ways to achieve this is to implement and distribute your product as much as possible. There are two ways to solve this problem.
First, free distribution for the test group. These can be doctors or patients when it comes to applications or devices. As well as shareware and access for a short time, during which the necessary statistical data and feedback from users will be collected. This method allows to shoot two birds with one stone: test the product in order to identify its strengths and weaknesses, as well as to conduct an in-depth analysis of the target audience.
Secondly, a large-scale advertising campaign, thanks to which the product will become as widely known to the wide consumer as possible. The greater the audience reach, the greater the chances of introducing a ready-made application or software in hospitals and medical facilities. However, this method is not suitable for niche products that are designed for a limited group of consumers.
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Use innovation and original solutions
Today’s healthcare challenges include hypothermia management in premature babies, lung infection in ventilated patients, life support for babies outside the NICU, more accurate labor monitoring, vertigo diagnosis, post-cardiac event monitoring, and screening for blindness, cancers and other conditions.
To find the proper solvation and offer the truly unique product the startup should leverage cutting-edge technologies such as machine learning and artificial intelligence, along with electronics, mechanical engineering, and product design expertise, to create innovative, patented, products that address the global market.
The startup on the early level of investments can start on the local market, solve problems only of their own region or of a particular medical institution, but a business plan and strategy must necessarily take into account the further growth and expansion of the market of consumers of the finished product. This may include the development and implementation of additional functions in the application, the improvement of equipment for new needs, the expansion of the product line with new models.
Properly monetize the product
The general mistake of startups is the lack of a plan for the long term. As a rule, most companies make forecasts for two or three years ahead, on the basis of which the strategy of growth and development is built, and the future profits and opportunities of the company are predicted. Also, such a plan rarely includes the monetization of the final product. It is not reasonable to include a lot of paid services or restrictions at the initial stage of developing or implementing your offer. However, an understanding of how this can be implemented in the future should be already at the initial design stage.
Monetization is also one of the ways to attract investors, as it clearly demonstrates how to make a profit from the project. Most often, monetization includes advanced features for subscribers or additional services for a fee, placement of links or advertising.
It is important not to overdo it with the implementation and application of the selected methods of making a profit. First and foremost, the final product must address the challenges facing healthcare industry and be attractive to consumers. If you make an application overwhelming with advertising or absolutely all useful functions are made payable at the start of product implementation and distribution, you can ruin the entire project instead of receiving new funding for further development.
Professional financial experts and marketing specialists will help in the development of the monetization plan for the project.
HealthTech is one of those areas where there have been many changes in recent years. It is noteworthy that the reason for the transformation was not big companies and veterans of the market, but startups, with readily solving healthcare challenges.
However, the reverse side of the medal shows that not all enterprises are durable: the success gained at the start is very difficult to maintain if you ignore the main factors for the development of firms in this industry. Remember, the phrase “have a finger on the pulse” is as relevant in the Healthcare sector, as nowhere else.
A team of experienced engineers can help solve any HealthTech startup challenges. Email us at email@example.com and we’ll discuss the details.
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