Rock Health’s latest crop of startups

Rock Health, probably the leading healthcare focused accelerator programme announced their latest class of companies this week. They are profiled on Techcrunch here and briefly summarised below.

I’ve written a reasonable amount on here about the coming opportunity in health and as regular readers will know I think the most exciting opportunity is in consumer oriented healthcare services delivered online and over mobile. Many of these will be cheap enough that they can bypass traditional health distribution systems (e.g. the NHS here in the UK and insurance companies and doctors in the US) and many will leverage smartphone technology for diagnosis or data capture purposes. The big question for this investment thesis is unsurprisingly timing. I am confident we will see a wave of companies coming, but the key to making successful investments is to time your activity with the first burst of market growth. One way to think about that is when penetration moves from say 0.25% to 5% – that is typically when companies can grow really fast and valuations sky rocket as analysts and incumbents come to recognise that a major market shift is underway. Founders need greater prescience and will be best placed start their companies a year or two earlier, but probably not five years earlier.

So when I saw the Rock Health list of companies I read the profiles in search of pointers about the timing of the market for my hypothesis about the opportunity in healthcare, as well as for signs of other potential investment theses.

Going through the list of 13 companies I found 4-5 that are consistent with my hypothesis (Agile DiagnosisCardiioCare At HandSessionsSano Intelligence) which I take as evidence that the timing for this market may well be now.

The Rock Health companies

Achievemint – rewarding consumers for healthy behaviour – with real world goodies paid for by insurers

Agile Diagnosis – web and mobile app for doctors to improve speed and accuracy of diagnosis

Avva – patient focused cancer management tool – helps patients and families get the information they need

Cardiio – technology that turns a smartphone camera into a sensor – e.g. to measure heart rate by looking at someone’s face

Care At Hand – monitors patients at home – e.g. to report on non-compliance

ChickRX – health Q&A site for women, will also sell products

Cognitive Health Innovations – service allows therapists to communicate with their patients via mobile and social

Docphin – health information system, initially providing doctors with access to medical news and research

HealthRally – crowdfunding platform to enable friends and family to reward healthy behaviour

Medmonk – a tool to help pharmacists find discounts for customers who cannot afford to pay

Nephosity – medical images on the iPad

Sessions – a personal exercise coaching platform

Sano Intelligence – wearable patch that tests the blood via micro-needles and sends results to doctors at regular intervals

  • Philipp Butscher

    I
    agree – and would like to add another important point wrt our investment thesis:
    the type of business model.

     

    I
    see three main options with a deep impact also on timing necessities:

     


    traditional healtcare business model (reimbursement/DRG), the so called „primary
    healthcare market“


    „secondary healthcare market“, i.e. all health-related products and services
    which are paid for privately by consumers


    „traditional“ digital business models (advertising, freemium, XaaS, …)

     

    Of
    course we are – in most cases – going to see a mix of these models as a
    function of need for regulatory approval, type of service/product or country. 

  • http://www.theequitykicker.com brisbourne

    Hi Philipp – your 2 and 3 are what I meant by ‘direct to consumer’, albeit in a bit more detail. I think an ageing and wealthier population will divert an increasing percentage of their income to tools and services which keep them healthy and feeling good. Building sales with what you call the traditional healthcare model takes too long for my liking.

  • Philipp

    You’re right – as long as there’s no need for regulatory approval; some of the above mentioned products/services will have to deal with that issue. And then others – unfortunately – will set the pace… Exactly these companies are probably not interesting enough for VC money.

  • http://www.theequitykicker.com brisbourne

    Regulation is a big question for this market. Why do you say the companies that will set the pace won’t be interesting enough for VC?

  • Philipp

    Sorry for the ambiguous statement; to be more clear: 
    need for regulatory approval –> involvement of regulatory bodies –> these entities will, at least partly, set the pace. So in my opinion, companies in the “regulated” consumer oriented healthcare services field are less interesting for VC financing.

  • http://www.theequitykicker.com brisbourne

    I agree. Non-regulated will be much easier. The question is whether it will be possible to do interesting things without getting regulated.

  • Joey Mason

    Hi Nic and Philipp. Agree with the comments. If the services are not regulated, they face the same issues as anyone else in creating a brand. If they are doing something really useful (and making claims about it in their marketing), they will end up being regulated. A bit of a catch-22. 

  • http://twitter.com/alicethompson alicethompson

    Definitely interesting things out there that only require Class I or IIa MHRA approval but NICE in the UK does in effect act as another regulator as without approval can’t get prescription funded mass take-up.  Within UK does seem a two pronged strategy is required growing relatively small scale private patient take-up in parallel to NICE approval but that looks like at least a 2-3 year play – Resparate (although v low tech) seem to be a good example of how to get this to work.

  • http://www.theequitykicker.com brisbourne

    I’m not sure that applies to all companies. What about services like Fitbit, heart rate monitors, and blood glucose monitors?

  • http://www.theequitykicker.com brisbourne

    Resparate is a great example. With the right sort of product and good consumer marketing it ought to be possible to do better than a ‘relatively small scale private patient take up’.

  • http://www.theequitykicker.com brisbourne

    These devices are great examples. Good to hear PMA not required. I’m going to get one of these when it comes out on Android.