The Rise of the Digital Health Industry in Israel

People are living longer, chronic illnesses are being identified more frequently, and the costs of quality healthcare are increasing at the same time. These interwoven forces are driving global demand for innovative digital health solutions that can improve patient engagement and adherence, as well as address emerging healthcare markets.

While digital health is on the rise on a global scale, the Israeli ecosystem, in particular, is quickly gaining traction from innovation and investment standpoints.

The Growth of Israeli Digital Health Over the Last Decade

In 2005, there were around 65 active companies in the Israeli digital health ecosystem. However, this number has grown steadily over the last decade, leaving the digital health ecosystem with almost 400 active companies.

The digital health ecosystem is made up of start-ups that are being supported by incubators, accelerators, venture capitalists and multi-national companies. Some of the developments come to light through the work of these large well-funded companies:

• IBM: With an Israeli R&D center, IBM aims to create state-of-the-art IT solutions for healthcare and life sciences. IBM also launched an accelerator titled “IBM Alpha Zone”, a professional immersion program intended to help develop solutions for the enterprise market and integrate digital health companies in each of its classes.

• Philips: Active in the Israeli market, Philips has a joint venture with Teva Pharmaceuticals called Sanara Ventures, which operates within an incubator model. Through this, they invest in and mentor Israeli digital health start-ups and medical devices.

• Venture Corporate Arms: There are multi-national companies that are active in the digital healthcare field in Israel as investors. For example, with a presence in Israel since the 1990s, Microsoft continues to fund – Israeli digital health start-ups through its Microsoft Ventures Program, alongside other multi-national investors, including GE and Merck.

These are just a few of the global enterprises that have contributed to the growth of the Israeli digital health ecosystem. And while there have been venture capital firms in the country for a while that are active and invest in digital healthcare, such as Pitango, LionBird, Orbimed, and Triventures, we are starting to see even more venture capitalists showing interest in the digital health field. For instance, Elevator, a leading investment firm, is now focusing investment funds in digital health, and eHealth Ventures, a new consortium fund, focuses solely in digital health.

Funding rounds are seeing significant growth, but which initiatives specifically are drawing investors attention?

The Key Initiatives Driving Israeli Digital Health Development

 One of the niches within the ecosystem of digital health solutions, , which are drawing attention around the world is based on remote personal monitoring and disease management solutions.

To provide more universal care, companies are focused on making medical self-monitoring and receiving help more accessible and easy. For example, newly-funded Israeli start-up, TytoCare, developed a platform that enables remote examination and consultation with a physician—a solution that can drive universal care, as well as increased patient engagement, even in more urban environments. In addition, EarlySense has received $25M funding in 2016 to further develop, together with Samsung, their direct-to-consumer, contact-free sleep monitor.

Mobile health technologies are another game-changers being utilized as tools for disease management, remote monitoring, and behavioral health solutions. Sweetch . is working on a predictive mobile platform that uses algorithms to drive long-term and personalized behavioral changes to prevent diabetes. In the last two years they raised more than $4M.

2016 investment activity in the Israeli digital health ecosystem is reflective of the country’s internationally-recognized advancements and developments in diagnostics tools that are easy to use and provide smart, efficient, accurate processing of results using big data and mobile platforms. Whether you want to take advantage of the growing behavioral health trends or invest in a start-up focused on emerging markets such as remote diagnostics, the Israeli digital health ecosystem is a growing force that should be considered.

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