So far this year I have participated in two significant venture capital rounds in Finnish health tech companies. BC Platforms' genomic data management platform integrates genomics with clinical and other health data, enabling more reliable diagnosis, more effective and safer pharmaceutical development, and a sounder basis for preventive healthcare. BCB Medical develops clinical disease-specific quality registers, enabling the patient to receive treatment based on proven best practices regardless of where the treatment is given.
These companies plan to revolutionise medical development and the way clinical data impacts peoples’ lives. Both companies offer solutions that enhance efficiency in utilising health data.
Data revolutionising healthcare
Electronic health services, preventive healthcare and outcome-based healthcare are well-known megatrends, and familiar themes at industry events. Most of these drivers share one thing in common – data. Consequently, data collection will grow as the adoption of wearable technologies increases, as data is progressively utilised in health-related e-services, and as existing data is interpreted in new ways – with the assistance of artificial intelligence, for instance. The greatest benefits, however, are yet to be tapped.
Development of the industry needs an open and transparent business climate that favours new and experimental practices. A recent KPMG study lists the Nordic countries’ healthcare systems at the very top of its global transparency ranking. In Finland, for instance, our strengths are comprehensive digital patient registers and the availability of healthcare data for R&D purposes. Similar conclusions were drawn in the Way Forward report published by Finpro and Ernst & Young, which listed the digitalisation of healthdata as one of Finland’s four healthcare assets. Finland thus offers an ideal environment for new business models in the health technology sector.
Data alone will not improve health or bring added economic value. Data must instead be linked to other sources and also interpreted correctly. Finland has a progressive Biobank Act that already legislates for the extensive collection of samples and data. Nevertheless, the full potential will only be realised when the data has been sufficiently processed and the correct conclusions can be efficiently reached – while also, of course, safeguarding data security. Between the data and the benefits to be reaped from the data lies a niche of huge opportunity for companies and investors.
Healthtech already comprises Finland’s largest and fastest growing hi-tech export sectors, producing a trade surplus of around one billion euros. On top of this, giants in the technology, health and pharmaceutical industries, including IBM Watson, GE Healthcare and Bayer, have made major investments in Finland. What is the most interesting is that there are hundreds of startups developing health technology. While the industry seems to be booming already now, I firmly believe that we will see an even bigger breakthrough in healthtech in the coming years.
Scaling it up with venture capital
Most startups in this sector are still in the early stages of their development. Within a few years the most successful of them will have reached larger milestones, where the sky is the limit as we have seen in gaming. Already now, international venture capitalists are active in the sector, and in fact, this year, many of the largest venture capital rounds in Finland have been raised by healthtech companies. Tesi as a local partner has worked together with international venture capital teams in providing local companies such as such as BC Platforms and BCB Medical with capital, expertise and networks to grow in global markets.
Using diversified financing solutions enables companies to grow even faster. I am convinced that we will see many other health technology success stories step onto the international stage over the next few years. Finland may, in fact, well become the health technology centre of Europe. Although this is a relatively new sector for the country, we have the right business climate and already boasts success stories in the fields of IT and healthcare. Are you among the investors discovering the next Supercells of healthcare?
Joni Karsikas joined Tesi’s Venture Capital team in 2017 after 5+ years as a consultant in KPMG’s Global Strategy Group, where he managed growth strategy as well as M&A engagements with clients in PE and growth companies. At Tesi, he is responsible for screening and assessing technology companies, investment execution and value creation in portfolio companies, as well as building relationships with Finnish and international investors.
The blog post was published on Good News From Finland on November 2, 2017.