Investor’s perspectives on Digital Health investments
After having described in her first blog post the manifold cooperation possibilities of the stakeholders in Berlin´s digital health ecosystem and in her second post the experiences of the start-ups with these offers, Ute Mercker finally would like to shine a light on the investor’s side of the coin.
As already mentioned, a new fund was recently announced which has been initiated and will be managed by two important players in the Berlin ecosystem: Flying Health and Heartbeat Labs.
Flying Health the private incubator, initiated by Markus Müschenich in 2012 has already been introduced to you. Heartbeat Labs is a private incubator/funds as well, which has been initiated two years ago by the founders of finleap transferring their expertise to the healthcare market.
In September both incubators announced that they will be managing Heal Capital, the Euro 100m funds financed by German`s private health insurance companies together! The funds will be focusing on later stage investments in digital health companies in Germany and aims to have the first closing by year end. As Eckhardt Weber founder and MD of Heartbeat Labs and partner of Heal Capital states: “We have the impression that the market needs more investors who unite both capabilities: in depth knowledge of the healthcare markets as well as of digital business models.” Both partners will be investing in the funds as well. The investment activity will focus on companies in the field of digital health applications, telemedicine, digital prevention and digitalisation of care.
In order to invest into later stage deal, early stage investors are needed to support companies and their products in the early development phase up to successful market entry. And here our own funds, the Venture Capital Funds of the state of Berlin, comes into play. As one of the most active players in the Berlin ecosystem healthcare investments have been in our investment scope since 1997. Since we are always investing “ pari passu” together with private investors our portfolio companies can rely on many years of experience and our extensive network of experienced and reliable investors partners. Our first digital health company was CommitMed, the German market leader for the dispatch of care aids named “Pflegebox” . We financed the company for the first time in 2012 and successfully sold the shares last year in a secondary transaction.
A long term investment partner and Berlin based early stage investor in digital health companies is Peppermint Venture Partners. They started investing in digital health in 2014 and managed to get the first app on prescription reimbursed by health insurances through their portfolio company Caterna. Klaus Stöckemann founder and MD of Peppermint Ventures describes his experience as follows: “To be a guinea pig can sometimes be an advantage especially if you are willing to learn. We started in 2014 with Caterna, a digital health start-up which had developed the first app on prescription for treating lazy eye reimbursed by BARMER. Also our digital diabetes company Emperra signed its first selective contract with AOK-NO in 2014/15 and could prove health economic benefits. These were major achievements at that time, but are only some of the steps required to build a successful company! Nevertheless, we believe in validated products and are very confident that with the DVG (German Digital Healthcare Act) the Digital Health ecosystem will be boosted towards meaningful digital solutions. So with DVG investing in the Digital Health space remains a must fostering the needed transformation of healthcare!”
One of our most recent investment partners in the digital health space is the Think.Health funds. Think.Health started to invest in 2015 and has already realised successful exits of their portfolio companies like HeyHelp or HelloCare. They have offices in Bavaria and Berlin and invest into companies in Germany as well as in the US.
As Florian Kainzinger, Founder and MD of Think.Health states: “We have focused our investments on Digital Health for several years. This segment has — within the scope of our social developments — enormous future opportunities and at the same time we have to look for new ways to ensure the supply of the broad population also in the coming 10–20 years.” As he is responsible for the Berlin based activities of Think.Health and — as former CEO of Labor Berlin — is involved in the local healthcare market for a long time, he knows the ecosystem very well: “Berlin in particular is an ideal location for our projects, as we find good founders, see an enormous talent pool of employees and at the same time a close and regular exchange with the regulative and administrative offices, that are so important for the health care system, is made possible”.
With this post we end our series about the digital health ecosystem in Berlin. I am sure you took the opportunity last week — during Frontiers Health 2019 — to make up your own mind of the ecosystem. For more information about our funds, which invest exclusively in Berlin based companies, please visit http://www.ibb-bet.de or https://medium.com/ibb-bet-insights.
Originally published at https://www.frontiers.health on November 17, 2019.