Sabine Kaiser has over twenty-five years of experience in the Health Tech industry and is a member of the seif Awards jury 2019. Read our interview with Sabine to learn more about the challenges and opportunities facing the Health Tech sector today and to get her golden advice for early stage startups in the industry.
Sabine, you have a unique overview of the venture eco-system in Health Tech in Europe. What are the main trends you observe in the Health Tech sector?
My answer to that question today is very similar to when I started in this industry over twenty years ago, digitalization and personalization. Today, the keywords of digitalization include artificial intelligence (AI), software as a medical device and decision support systems. On personalization, the keywords include companion diagnostics, app-based personalized treatments and patient stratification. By now, these trends display an ongoing momentum, real strength and have already shown meaningful outcomes.
What are the greatest challenges at the moment and where do you see structural gaps and missing links to move the sector forward?
The Health Tech sector is currently facing both old and new challenges. Older challenges include the scarcity of a desire for risk taking (both amongst investors and would-be entrepreneurs), the scarcity of early stage capital and investors’ biases – leading to overfunding of hyped segments and underfunding of disliked segments as investors hunt in packs. In addition, some patterns are rather contradictory. As an example, there is a strong belief in personalized medicine being the future while there is still a reluctance to fund the diagnostic tools required for personalization to get off the ground. Newer challenges include the paralysis created by the painfully slow implementation of MDR/IVDR (medical device/in-vitro diagnostics regulation) as well as the self imposed constraints and pitfalls of GDPR (General Data Protection Regulation) in Europe.
What kind of support and new instruments are needed to overcome these challenges?
Authorities and regulatory bodies need to get going. We need to keep discussing the legitimate desire of individuals to not see their personal data exploited for unilateral profit generation, and the legitimate desire of critically ill patients to benefit from the insights of smart analysis and interpretation of big clinical/patient data sets.
As for the required risk taking and early stage focused investors, I pitch my hopes onto the angel and HNWI (high net worth individuals) community. Often, they see Health Tech as the last remaining segment where it makes sense to invest from a fundamental point of view, and/or they are driven by personal experiences and impact considerations. Still, they are nevertheless hesitant to invest in the sector due to a perceived lack of knowledge in what is seen as an expert space. The formation of dedicated healthcare focused angel groups as well as Health Tech training and knowledge pooling efforts are encouraging developments in so far sector agnostic angel groups.
Impact Investing is strongly connected to the Sustainable Development Goals. In in the healthcare sector there are solutions needed for larger populations and with respect to data security. What is your perception of the discussions in the health sector connected to the impact dimension?
Health is increasingly seen as one of the main impact focus areas, also in the developed world, with inclusion and education being the most popular ones in recent years. As an example, FASE, the financing agency for social entrepreneurship, recently introduced health as one of their prime impact sectors.
Talking about solutions needed for larger populations, the aging population inevitably puts the challenge of how to care for the elderly onto the health and impact agenda. An open question here regards how digital solutions (created in abundance) can compensate for the lack of helping hands and personal attention. On data security issues, the interest in privacy protection typically wanes when individuals are faced with a severe health problem personally or in the family.
When you compare the DACH region with the other European countries, where do you see the main differences in the development of the Health Tech sector?
The differences within Europe are not very relevant in the global scope. In comparison to Europe, Israel is a Health Tech innovation hot spot and China a big data paradise. However, there are a few notable trends. In the Netherlands and Belgium, I see a buzzing eco-system benefitting from density, an entrepreneurial mindset, short distances and openness – there are small, if any, language barriers and lot of cross-border activities. France has always provided a lot of (tax) support for their start-up universe, but seems to be a rather closed ecosystem. The DACH universe is quite parochial – organized across federal, regional and local dimensions, not necessarily extending across either country or neighboring city borders. The fragmentation of the tech transfer industry within DACH is impressive, but I cannot really judge whether this is much different elsewhere.
Regarding the future development, where do you see risks and where are the great opportunities?
As always, pain is close to pleasure and great risks and opportunities are not too far apart. What is hyped today, such as AI, is hyped for a reason – first success cases and real-value added. However, somewhere at some point the hype always leads to disappointment when reality can not match the expectations, with or without the fraud that hype often brings with it. Following, disappointment leads to collective retrenchment and funding issues if picked up by the media and the community.
What are your golden advices for early stage startups in the Health Tech sector?
Make use of some of the brilliant incubator and accelerator programs available in most places. Try to get accepted to the program that is the best fit for you, even if it may not be right at you doorstep. Finally, do it early in your start-up career rather than later.