Investors Flock to Healthcare AI start-ups with huge investments
Funds provide monetary support to companies, individuals, public and private hospitals, universities, medical research institutes and the medical device industry to help in the development and commercialization of their various innovative technologies. IQ4I analyzed the funding received for approximately 200 representative AI-based healthcare companies across the globe for the period January 2019 to October 2020 specifically for the development or up-scaling of AI solutions. As per the analysis, the funding received by these companies during the period 2019-2020 is estimated to be ~$5,000.51 million. These investments were to scale up the proprietary AI platforms of the companies and to expand the geographical reach of these highly efficient AI solutions across the various healthcare categories of application areas like Medical diagnosis, Drug discovery, Clinical trials, Precision medicine, Healthcare Documentation and Management, Screening and AI guided robotic surgical system.
The majority of the funding, approximately 32.8% or $1,638.4 million, was aimed at the advancement or expansion of the AI-powered drug discovery platforms with additional capabilities and for the acceleration of their international expansion. The soaring urge to increase the R&D efficiency, reduce the constantly increasing R&D expenditures, drug discovery time and drug attrition rate of pharma companies and the shifting focus of most of the pharmaceutical companies towards the discovery and development of drugs for the potentially high growth but untapped zone of rare diseases are some of the factors that are driving this market growth. For instance, during the period, Recursion Pharmaceuticals received $360 million from investors like Bayer, Casdin Capital, Catalio Capital Management, Laurion Capital Management, Samsara BioCapital for the advancement of its AI-enabled drug discovery platform and pipeline products.
The field of healthcare documentation and management was showered with huge investment for up-scaling of the AI platforms of the healthcare assistants with additional features, for the commercial deployment and international expansion of these vital signs or chronic disease monitoring, patient engagement and workflow optimization tools. Factors like the need to improve healthcare efficiency, reduce healthcare expenditures especially those associated with hospital readmissions, reduce physician burnout and handle healthcare workforce deficit crisis effectively, escalating number of smartphone users, persistently elevating chronic disease patient pool and geriatric population in dire need of various advanced, continuous monitoring and assistive technologies for efficient management and prevent further deterioration of the various chronic health conditions, to democratize quality healthcare services especially in the current pandemic situation, increasing demand for early detection of chronic diseases are steering the market growth of these AI-enhanced virtual assistants. During the period, PIF (Saudi Arabia’s Public Investment Fund), Munich Re’s ERGO Fund, Kinnevik and Vostok New Ventures invested $550 million in Babylon Health to support its business expansion plans to the U.S. and Asia and also for the expansion of its R&D for diagnosing more serious, chronic conditions.
Investors flocked with huge investments for the commercial expansion of AI-backed diagnostic solutions to new disease areas and geographies. Increasing demand for accurate and rapid data-based holistic diagnostic conclusions with minimal probability of medical errors, the need to prioritize high-risk patients and the persistently elevating prevalence of chronic and communicable diseases which are in dire need of instantaneous diagnostics to reduce healthcare expenditures and improve outcomes are some of the factors that are driving the specific market growth. Whooping investments were also noted to upscale or expand the technology platform suite and accelerate the international expansion of the various AI guided precision medicine, screening, clinical trial, biomedical research and robotic surgical system solutions respectively.
Regionally, U.S. based AI companies had received the largest investment for the up-gradation and commercialization of their AI solutions attributed to the conducive regulatory environment and various AI supportive government initiatives in the region, the availability of highly skilled AI expertise, massive healthcare-associated digital data and sophisticated infrastructure for the deployment of AI solutions and the rapid global acceptance of the products developed from the region. U.K. based AI companies were also flooded with huge investments for the up-scaling and expansion of their AI platforms due to the availability of skilled AI professionals, structured and digitized healthcare data and the requisite infrastructural facilities for AI deployment, flexible and streamlined regulatory environment and the various government schemes for the widespread adoption of AI in the region and the products developed from the region being able to gain an easy international market expansion and commercialization feature. Israel based AI companies were also thronged with huge investments for the enhancement and international expansion of their AI innovations attributed to the availability of AI skilled human capital in the country, technological innovation and entrepreneurial spirit favoring regulatory environment and government measures in the region and availability of the enormous amount of structured healthcare data.
Thus as the funding process or investments powers businesses, fuels the development and up-scaling of AI-based healthcare innovations and supports the growth of the enterprises, numerous, novel, value-based contributions of AI to the healthcare industry can be expected in the coming years.