Digital health, a relatively new frontier in healthcare, is transforming the sector with its high potential to enhance patient outcomes, increase accessibility, and provide cost-effective solutions. The ongoing digital health revolution is prominently noticeable in Europe, where healthcare companies are playing a significant role and investing in innovative digital health products, such as telemedicine, mobile health apps, and electronic health records, etc.
The demand for digital health solutions has exploded in the wake of the COVID-19 pandemic, and small-cap healthcare companies have seized this opportunity. Their agility allows them to quickly pivot and develop innovative solutions that resonate with the evolving needs of patients and healthcare providers.
Take the example of KRY, also known as LIVI in the UK and France, a small-cap telemedicine company listed on the Stockholm stock exchange. Providing a platform for online consultations, KRY raised around €140 million in 2020, with plans to further refine its platform and expand its reach across Europe.
Push Doctor, a UK-based company listed on the London Stock Exchange, is another small-cap company making waves in the mobile health apps space. The company raised significant funds in recent years to improve its app-based platform that facilitates patient engagement and remote consultations.
In the realm of EHRs, the small-cap company Induction Healthcare Group, also listed on the London Stock Exchange, is noteworthy. The company provides a digital healthcare platform, Induction Switch, that streamlines the sharing of patient data. After raising considerable capital, Induction is now planning to further develop its platform and improve patient data sharing across healthcare providers.
These small-cap companies typically raise capital through initial public offerings (IPOs), rights offerings, private placement and debt offerings. The raised funds are used to fuel research and development, scale-up operations, and navigate the regulatory landscape of the healthcare industry. Many are also reinvesting their profits into digital health innovation to retain their competitive edge.
While the capital is crucial for research and development, it also allows these companies to navigate the complex regulatory environment of the healthcare industry, especially when introducing new digital health technologies. With regulations varying across European countries, sufficient capital allows businesses to ensure that their products are compliant and can be seamlessly integrated into various healthcare systems.
Despite the challenges, the rewards of investing in digital health are immense. A study by Roland Berger estimates that the digital health market in Europe is set to grow from €53 billion in 2019 to €155 billion by 2025. Mid and small-cap companies with the right digital health products could capture a significant market share, translating into a win-win for both patients and investors.
The digital health revolution in Europe is not just a story of large, well-established players, like Teladoc Health and Royal Philips. Small-cap publicly listed companies, through their innovative solutions and strategic capital raising, are proving to be dynamic contributors to this evolving narrative, bringing us one step closer to a future where healthcare is more accessible, efficient, and personalized.