5 healthcare startups to watch

Perhaps more so than any other industry, healthcare has been transformed by the pandemic. A disease that thrived off of proximity required innovative technological solutions to keep patients connected to care—and big tech delivered.

Over 16 months, businesses have been damaged or shuttered by the COVID-19 pandemic, resulting in more than 22.4 million Americans losing their jobs in March and April of last year, according to the Bureau of Labor Statistics. The healthcare industry was no exception when it came to COVID-19, with a reported 1.5 million healthcare workers losing their jobs from February to April 2020. Because of COVID-19, the American Hospital Association reported that US hospitals and healthcare systems lost more than $202.6 billion in revenue.

While in-person clinics and healthcare services have been facing financial and logistical challenges, the digital healthcare market has seen continuous growth throughout the pandemic. One study found that online healthcare services received more funding than ever before—a record $8.4 billion. The dramatic increase in healthcare-related apps and startup companies can likely be attributed to COVID-19 affecting the affordability, practicality, and convenience of visiting physicians in-person, thereby making online startups a cheaper, safer, more convenient alternative.

Healthcare startups will continue to proliferate in the post-COVID-19 market. Here are five you may want to watch.

Headspace

Headspace has been around for a few years now, but it has only recently begun seeing a serious increase in growth, based on the app’s rising number of subscribers. Its user base has grown from 0.4 million in 2017 to 2 million in 2020. 

The app is designed for guided meditation and practicing mindfulness, and it is one of the fastest-growing mental healthcare startups of its kind. A recent report showed that Headspace’s funding has risen dramatically, ballooning from $38 million in 2015 to $215 million in 2020. The value of the company has also increased, rising from $50 million in 2014 to $320 million in 2018.

Meditation itself has increased in popularity in recent years. According to the CDC,14.2% of Americans tried meditation in 2017, more than tripling the amount from 2012. This increasing interest in meditation is paying off for companies like Headspace, whose number of downloads rose from 1 million in 2014 to 65 million in 2020.

The app features more than 500 guided meditations, with a specific focus on battling stress, anxiety, and insomnia. The meditations vary in length depending on users’ experience with meditation, and the app also helps users fit meditation activities into their daily schedules.

HealX

Combating new and rare diseases is likely to remain a priority in a post-pandemic world. At the forefront of companies researching these new diseases and treatments is HealX, a startup that has won critical acclaim from numerous medical organizations. 

HealX uses AI to analyze existing drugs on the market that might be repurposed for treating rare diseases. The company has already seen success by developing a drug treatment for for Fragile X syndrome, a genetic condition that causes developmental problems. HealX is currently researching drug treatments for Pitt Hopkins syndrome and COVID-19.

HealX has won praise for merging AI technology with medical research. In 2020, the company received three awards from CogX, the world’s foremost AI festival celebrating the highest achievements in technological integration. Those awards included Outstanding AI Accelerator/Incubator, Best AI Product in Health, and Outstanding Achievement in Social Good use of AI. In October 2019, the startup raised $56 million in their Series B funding round, and netted an estimated $9.8 million in annual revenue.

Fisher Wallace Laboratories

The demand for mental health services has increased dramatically, especially during the pandemic. According to the CDC, roughly 40% of US adults reported struggling with mental health. Additionally, 30.9% reported symptoms related to anxiety or depression. With such high numbers, many are turning toward alternative forms of treatment, such as Fisher Wallace Laboratories’ newest product, the Fisher Wallace Stimulator.

The Fisher Wallace Stimulator is an electronic device specifically aimed at combating anxiety, depression, and insomnia. The Stimulator is relatively easy to use, and provides a light electrical pulse that helps the brain produce serotonin, which results in a calming effect. It has been tested and submitted to the FDA, and multiple clinical trials proved the device’s positive effect on users.

As further attention is put on mental health, Fisher Wallace Laboratories has gained more acceptance in the world of mental healthcare, especially for its cost convenience. The company said it has sold more than 70,000 Stimulators through 10,000 licensed medical providers in the United States. The product has also been approved by the New York City Health and Hospitals Corporation for use in 11 of the city’s major hospitals. In terms of future growth, Fisher Wallace has obtained approval for the right to sell their product over-the-counter in Europe, and has earned a healthy $3.13 million in revenue this past year.

TailorMed

Care affordability is a huge burden faced by many Americans. According to a study by the West Health Institute, 44% of people reportedly avoided visiting their doctor in 2018 due to high medical costs. TailorMed, an economically rooted tech company, provides a useful alternative platform that helps keep track of patients’ finances. After identifying patients facing financial difficulty or those who are unable to pay for treatment, TailorMed matches and enrolls patients in financial assistance programs to reduce the cost of their healthcare treatment.

With ever-rising healthcare and insurance costs, it’s safe to say TailorMed will continue to grow as a cost-effective way for patients to receive medical treatment at a cost they can afford. 

TailorMed is currently being used by more than 50 US hospital systems and 200 healthcare clinics. Just recently, the startup announced a $20 million investment from financial backers, and has obtained more than $500 million in total funding, signifying healthy growth for the future.

Freenome

Fighting cancer remains one of the medical world’s biggest challenges. According to the CDC, cancer-related fatalities are the second-leading cause of death in the United States. The future of this fight might well rest in healthcare startups like Freenome, a biotech company finding new ways to detect cancer in its early stages through a simple blood test. 

Combining molecular biology with machine learning, researchers at Freenome analyze DNA blood results to spot any irregularities that may be an early warning sign of cancer. When the company was founded in 2014, TechCrunch reported that Freenome primarily focused on researching and detecting prostate cancer, but the company has since shifted to colorectal cancer as well.

Any startup that has invested in cancer detection is bound to be a relatively safe bet for the future—especially for one as fast-growing as Freenome. According to TechCrunch, the company secured $160 million in funding from investors in 2019. Last year, the startup received another $270 million in funding, raising Freenome’s total investment to more than $507.6 million. If early cancer detection is the future of the fight against the disease, it may be safe to assume Freenome will continue to grow and evolve as they continue their research.

Final thoughts

It’s hard to know which startup will be the next major company to rock the medical world. However, by seeing the types of medical businesses and research currently in demand (mental health, cancer research, etc.) and after checking the companies’ finances, these five startups appear to have a promising future.