![]() "Right now, in light of the unstable economic climate, expanding to the other side of the Atlantic seems to be an afterthought for many European startups, as they are struggling to scale on their own continent. That’s led to some startups thinking twice about US expansion, says Bérénice Magistretti, partner at Loop Ventures. Q1 figures from this year also show healthtech funding continuing to trend downwards this year. Funding into European healthtechs dropped from $6.6bn in the first half of 2022 to $5.1bn in the latter half, according to Dealroom. Last year tech salaries were about 40% higher in the US than they were in Europe, according to an Atomico report.įunding - especially for the growth-stage startups, which are most likely to expand internationally - is harder to come by now. “People cost more, legal costs more, marketing costs more. Then there are the costs of expanding into the US. In the US, it’s all of that plus revenue generation because healthcare is private and more commercial.” A funding crunch “In Europe healthcare companies tend to work with public healthcare systems and that means they’re focused on time and efficiency cost savings in terms of commercial traction. US healthtechs also have the home advantage as they think far more commercially from the get-go, says Parekh. You have to have a really tight value proposition,” she tells Sifted. “Everyone wants to work with so they get calls from companies like Sidekick all the time. We’re hearing from the market that there’s point solution fatigue,” says Mridula Pore, founder of employee healthcare benefits startup Peppy, which expanded into the US after raising a $45m Series B in January this year. “If you’re a healthcare buyer at an insurer or employer, your phone rings 20 times a day with startups selling a solution for one particular problem. ![]() “It created a perfect storm for new tech in the market.”Īll of this also means there’s a host of startups selling similar products. “Covid was the catalyst for tech adoption, because buyers and providers all aligned in adopting technology, and we saw a meteoric rise in the volume and quality of tech being produced in the US,” says Shamik Parekh, investor at Octopus Ventures. And since 2020, $199.5bn has been pumped into US healthtechs, according to Dealroom - about 20% more than the entire previous decade. The number of European digital health startups more than doubled from 100 in 2016 to 220 last year, according to a report from Speedinvest. But has rising competition and economic uncertainty made it trickier than ever to break into America?Īs the pandemic shut clinics worldwide, scores of healthtechs emerged or grew as healthcare providers raced to digitise. Building a team is more expensive, marketing’s more expensive and fighting against the competition is more expensive,” says Florian Semler, founder and CEO at German skincare startup Formel Skin, which chose to expand to Brazil rather than the US last year.ĭespite that, many European healthtechs still pin their hopes on stateside expansion, and a number of founders and investors tell Sifted that the market is a huge opportunity. ![]() “The US is a very crowded healthcare market, and you really need to fight for customers. Others, like Proximie and Unmind, also doubled down on the US after raising their Series B. Some of the biggest names in European healthtech - including telehealth provider Babylon, drug discovery company BenevolentAI and musculoskeletal health platform Sword Health - have gone west in the past few years, looking to tap into the world's largest healthcare market, worth $4.3tn. The US market has long been the holy grail for European healthtechs looking to go global.
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