A Hidden Gem Emerges: Israel is a Focus in the Digital Health Industry

Israeli technology is present in many of the products and services we use each day – except that it is usually so deeply embedded in the product or service that most are not aware it is even there. Even though, for example, most laptops are manufactured in the Far East, many of them (especially the ones that use advanced Intel processors) have made-in-Israel technology, both in the processors that make them work, and many of the peripherals (such as Intel RealSense 3D cameras) that make them unique.

As a result, the success story of Israeli tech is somewhat hidden from the general public; it is mostly a B2B arrangement. Hidden deep inside the final product or service offered to the public, Israeli start-ups and veteran companies alike have made do with knowing that they are “the power behind the tech throne” of many of the most successful products in the world.

The Israeli ‘brand’ (finally) emerges

However, Israel could finally have its moment in the B2C sun – with Israeli “branded” digital health products. Digital health, of course – where computer, sensor, and big data technology is used to help consumers get a better grasp of their personal health situation, and assists doctors and medical institutions to help manage patients’ care – is a burgeoning industry, growing by over 20% a year, according to industry experts.

Among other things, the digital health sector worldwide is rapidly transforming passive patients into active healthcare consumers, via the development of Personal Health tools, including apps and devices that provide information about health, exercise, specific conditions, etc., giving insights that can provide consumers and professionals with the data needed to improve health. Indeed, these patient/consumer-oriented solutions attracted over $4.5B in investments in 2016 – and following worldwide trends, Personal Health Tools have become the largest digital health subsector among Israeli firms. In 2016, there were almost 400 Israeli companies in the digital health arena – and 65% of them are focused on developing B2C Personal Health Tools.

Start-Up Nation Central, an Israel-based information source that follows and reports on Israeli start-ups working in a wide variety of technology-related areas, has produced a free downloadable report that tells the whole story. The 2016 Digital Health Report catalogs all the data available on Israeli activities in the arena, including highlighting the rapid growth of the sector among Israeli start-ups, as well as the investment opportunities available.

An opportunity to work with multinationals, not just start-ups

A good indication of the opportunity for investors in the Israeli digital health arena is the number and scope of multinationals, world-famous hospitals, and top investment funds that are partnering with Israeli entrepreneurs and organizations to develop digital health technology. In 2015, Samsung founded Samsung Runway, which focuses on working with early-stage Israeli start-ups in the fields of mHealth, big data, wearable devices, and IoT, among others. The Haifa-based MindUp is a medical technology incubator sponsored by Medtronic, IBM, Pitango Venture Capital, Impact 1st Investments and Rambam Medical Center.

eHealth Ventures, founded in 2014, is a consortium of world-class healthcare organizations and investors seeking opportunities in Israeli digital health start-ups, with a network of partners in North America, Europe, and Asia – including the prestigious Cleveland Clinic, via its Cleveland Clinic Innovations unit. Moreover, OurCrowd, one of the world’s largest crowdfunding platforms, recently established OurCrowd Qure, which, in collaboration with Johns Hopkins University, plans to invest in early-stage digital health companies, focusing on seed and A-round investments.

Many of the start-ups these organizations will be working with are focused on the Personal Health Tools subsector, which has 174 companies (45% of all Israeli digital health firms) – so they are likely to figure prominently in the projects and partnerships these powerhouse organizations develop. That is a big B2C opportunity, both for investors, who want to get in on what is turning out to be a major investment opportunity – and for Israeli firms, which could finally get the tech fame they richly deserve!

Download the Digital Health Report here!