Medtech (2024)

1. Rise of the robots

   • Surgical robotics is the hottest medtech vertical. Since the start of 2023, three of the four biggest medtech raises have all gone to startups building tools to help surgeons.

   • That’s partly driven by a change in the mindset of surgeons — and the bureaucratic folk who buy tech for hospitals — over the past two decades. For example, they’ve seen the wild success of US-based $150bn medtech Intuitive Surgical, says Anne Osdoit, partner at Sofinnova Partners. “For providers, it has become imperative to provide surgical robotics programmes as part of their care offer in order to remain attractive to surgeons and patients,” Osdoittells Sifted. Adoption of surgical robotics tools has increased as a result, she adds, meaning investors consider the space to be “de-risked”.

2. Next-gen diagnostics

   • There’s also buzz surrounding startups developing new ways to measure and monitor health data, as founders and investors look to tap into the trend of more people using wellbeing and fitness devices like Apple Watches and Oura rings.
   • Some novel business models are emerging as startups look to drive revenue while they’re in product development. Ukrainian-US startup Esper Bionics, for example, has developed a bionic hand for amputees — founder Dima Gazda told Sifted the startup wasn’t in the prosthetic limb business when it announced a $5m raise in June. Instead, it's using its robotic arm as a testing platform to develop next generation sensors for “mass market”.
   • The vertical has also seen the entry of tech royalty. Spotify’s Daniel Ek raised a chunky $60m in 2023 for his body scanning startup Neko Health.

3. An acquisitive sector

   • While there’s a very well trodden exit path for startups that do manage to develop products and navigate regulatory hurdles — those acquisitive corporates have begun to look for more mature companies in recent times.
   • The global downturn and rising interest rates have muted big medtech corporates appetite for risk, says Linus Rieder, principal at 415 Capital, and pushed them towards startups with proven go-to-market credentials.
   • It means investors could need to prepare themselves to settle in for a longer haul when they back a medtech startup.

Who early stage startups are up against