European Health & Biotech
2021 half-year update
1 July 2021
x
Today’s data will
be available on
health.dealroom.co
Healthcare shifting gears
Investment in European Health & Biotech
Investor landscape
1
2
3
Table of contents.
1 Healthcare shifting gears
Page / 5
1. Dealroom analysis of Eurostat and OECD data. Chart Inspired by LocalGlobe presentation.
$300
$50
$83
$83
$100
$200
$283
Monthly household expenditure in Europe (1)
Healthcare is one of the largest spending categories for households. But almost all
spending is indirect (insurance & tax). Consumer influence is limited, but growing.
<20%
Media
Energy
Fashion
Mobility
Health
Holidays
Consumers:
out-of-pocket payments and
voluntary insurance (growing!)
> 80%
Gov’t & insurers
In healthcare, it’s the insurers and governments (“payers”) that hold the power.
They want to control costs and improve outcomes — an opportunity for tech.
Providers
(health professionals,
hospitals)
Consumers
Payers
(insurers, governments)
Biopharma
Page / 6
Spending
$8 trillion
Funding
$8 trillion
Reimbursement
Payers want to control costs
and improve outcomes. In
order to achieve this they need
data transparency to follow the
patient journey, have
predictability and be able to
measure the ROI of
interventions.
Providers want to align
themselves more closely with
payers.
Professionals want to increase
their productivity and reduce
burnout due to admin (1).
Biopharma wants to find
treatments for big markets and
bring down cost of discovering
new drugs.
Consumers want better
healthcare and expect it to be
more like other consumer
products.
Source: Dealroom analysis of data from OECD, Eurostat, CMS, WHO.
1. According to Medscape, administration is the main cause of physician burnout.
USA
In the US, employers play a big role
in
private
insurance.
Those
employers want to control their
healthcare premiums. This means
startups can go to market by striking
deals with corporates; even with a
product that does not yet have
clinical evidence. An example is
Livongo.
16.9
Page / 7
Source: Dealroom analysis of data from OECD, Eurostat, CMS, WHO.
$0.1T
$3.9T
$0.4T
$0.3T
NetherlandsUSAGermanyFrance84%
16%
Spain79%
21%
Sweden$0.3T
$0.1T
5%
17%
78%
19%
6%
75%
16%
6%
78%
67%
29%
4%
Private insurers
(for profit,
regulated)
UK$0.1T
56%
Medicare,
medicaid,
other
10%
34%
▉ Consumers (out-of-pocket) and other
▉ Compulsory insurance
▉ Government schemes
State provided
healthcare
Europe
In Europe, governments, private
insurers and regulators have the
power together. They want to control
costs, but coordination is required to
get
things done.
This means
significant time between when a
technology is accepted by regulators,
when it is adapted in the healthcare
system and when innovators are able
to generate revenue.
In Europe, government and insurers have the power. In the USA, employers play an
important role and they can adopt innovation much more easily.
Governments and regulators are
increasingly putting incentives in place to
improve outcomes and reduce costs -
a huge opportunity for tech companies.
Sweden
Integrated electronic health record
solutions (EHRs) and e-prescriptions in
Sweden’s 21 regions since 2018
Teleconsultation reimbursed since
2016, enabling startups (KRY, Min
Doktor, Doktor.se)
Germany
Digital Healthcare Act adopted in 2019 to
support digital health innovation
€500 incentive for startup video
consultations
First country to cover prescribed apps:
Kalmeda (tinnitus), Velibra (anxiety)
UK
NHSX Innovation Accelerator and
$330M AI in health investment pledged
Central digital records locator and
booking app
Video consultation available through
every doctor’s surgery
France
Online diagnosis & treatment since
2018
Cross-border treatment: EU doctors
teleconsulting patients in France
KRY (Livi) and Doctolib market leaders
in French telemedicine
Page / 8
Classification according to Boehm model. Adapted by Dealroom.
State is provider of
healthcare
Private for-profit
providers
State financed
Private for-profit
providers
Compulsory
insurance
Regulated, private
for profit insurance
and providers
More state influence
Less state influence
Source: Dealroom.co.
Covid-19 accelerated telehealth across the continent.
Page / 9
Covid-19 was merely a catalyst for underlying trends that were already long
underway. The more meaningful shift will occur in the next two years and beyond.
Page / 10
Source: Dealroom.co
Payers pushing for value-based care
Growing number of connected devices/IoHT
Accelerations in AI, NLP, DNA sequencing,
editing, digital therapeutics
Digitally native population
Regulations around virtual care loosened
Trust in virtual care increased
The US finalized new rules around data
interoperability
Tech’s been proven in battle (e.g. mRNA)
Some new regulations made permanent
Providers need to align with payers more than
ever: more focus on value-based care
Consumers expecting increased virtual care
Large amounts of late-stage venture capital
Leading up to 2020
Covid-19 and its
second-order effects
Industry-wide
shifts
Healthtech
impact
Time
Page / 11
Healthcare ≠ better health: healthcare is only a 10-20% contributing
factor to quality and length of life. Tech plays role across all four.
Smoking
Diet & exercise
Alcohol & drugs
Sexual activity
Access to care
Quality of care
Education
Employment
Income
Family & social support
Community safety
Air & water quality
Housing & transit
Health behaviors
Clinical care
Social economic
factors
Physical
environment
30%+
10-20%
40%+
10%+
Source: County Health Rankings. Ranges added by Dealroom to reflect other studies.
Page / 12
83%
39%
61%
The holy grail for healthcare = prevention and early detection. This
paradigm shift has been long in the making, now accelerated by tech.
18%
█ Prevention & well-being
█ Care and treatment
Source: Deloitte.
2019
2040E
Deloitte
estimate
European Health & Biotech investment
2
Page / 14
Investment in European healthtech grew 2.6x, hitting €4.9B in the first
half of 2021.
VC investment in European healthtech startups » view online
Source: Dealroom.co.
€1.0B
H1
2016
H1
2017
H1
2018
H1
2019
H1
2020
H1
2021
€2.0B
€3.0B
€4.0B
€5.0B
▊ Series C €40–€100m
▊ Series B €15M-€40M
▊ Megarounds plus €250M+
▊ Megarounds €100–€250m
▊ Series A €4M-€15M
▊ Seed €1M-€4M
▊ Pre-seed €0M-€1M
$600M Series D
$525M Series D
$312M Series D
£195M Series H
$245M Series D

€185M Series D
$130M Series C
$115M Series C
$104M Series E
Top rounds in 2021
€4.9B
€1.9B
€0.8B
€0.8B
€1.5B
€1.4B
€2.0B
€0.8B
€0.9B
€1.2B
€1.7B
2.6x
Page / 15
Source: Dealroom.co and Google Finance.
Note: Sum of the valuations of all startups founded after 2000. Using estimated valuations based on most recent VC rounds, public markets and publicly disclosed valuations as of June 30th, 2021.
European Healthtech companies are now worth €50 billion.
Combined enterprise value of European healthtech startups
Most valuable European healthtech companies
Drug discovery with AI
Nanopore DNA
sequencer
Drug discovery with AI
Digital care
Digital care
Health insurance
Psilocybin therapy
Health insurance
Digital care
2016
2017
2018
2019
2020
Today
€10.0B
€20.0B
€30.0B
€40.0B
€50.0B
€49.7B
€29.9B
€25.3B
€17.4B
€12.7B
€9.4B
▊ Unicorn
€800M+
▊ Future Unicorn
€200M-€800M
▊ €0M-€200M
Page / 16
Investment in European biotech is also on a record level.
Source: Dealroom.co.
VC investment in European biotech startups » view online
€1.0B
H1
2016
H1
2017
H1
2018
H1
2019
H1
2020
H1
2021
€2.0B
€3.0B
▊ Series C €40–€100m
▊ Series B €15M-€40M
▊ Megarounds plus €250M+
▊ Megarounds €100–€250m
▊ Series A €4M-€15M
▊ Seed €1M-€4M
▊ Pre-seed €0M-€1M
$250M Series A
€160M Series A
$168M Series B
$157M Series D
$148M Series C

€127M Series B
$125M Series B
$110M Series C
$92M Series C
Top rounds in 2021
€2.9B
€2.0B
€0.9B
€0.7B
€1.3B
€1.2B
€1.6B
€0.8B
€2.1B
€1.4B
€2.6B
1.4x
€42B
Page / 17
Source: Dealroom.co and Google Finance.
Note: Sum of the valuations of all startups founded after 2000. Using estimated valuations based on most recent VC rounds, public markets and publicly disclosed valuations as of June 24th, 2021.
Europe’s Healthtech & Biotech companies are now worth €231 billion.
€9.4B
€13B
€17B
€25B
€30B
€51B
€68B
€93B
2016
2017
2018
2019
2020
Today
€115B
€166B
€50B
€231B
Combined enterprise value of European
healthtech & biotech startups created
since 2000
€55B
€75B
€90B
€136B
€181B
▊ Biotech = 78%
▊ Digital health = 22%
Page / 18
Source: Dealroom.co and Google Finance.
Note: Sum of the valuations of all startups founded after 2000. Using estimated valuations based on most recent VC rounds, public markets and publicly disclosed valuations as of May 3rd, 2021.
The top 10 most valuable European Biotech companies represent 65% of
the value.
€46B
€22B
€13B
€10B
€7.8B
€7.3B
€7.0B
€4.3B
€2.6B
€2.0B
mRNA
applications
mRNA
applications
Autoimmune
diseases
Gene editing
Endocrinology
diseases
Drug discovery
Hematology
medicines
Nanomedicine
Cell therapies Psychedelic drugs
Top 10 European Biotech companies founded after 2000
R&D layer
Intelligence layer
Infrastructure layer
Engagement layer
Professionals
Providers
Biopharma
Payers
Page / 19
Source for valuations: Dealroom.co analysis of private and public valuations.
Most global VC investment activity and value creation has been in the engagement
layer: building new user experiences.
$90B Digital pharmacies
$90B
Digital care incl telemedicine
$45B
AI-first drug discovery
$40B
Digital health insurance
$25B
Continuous remote monitoring
<$10B
AI decision support
<$10B
Surgical robots
<$10B
Home tests
$15B
Hospital operations
$5B
Practice management
$10B
Software for clinical trials
$10B
Digital therapeutics
Combined enterprise value
of companies founded since
2000 by segment and
innovation layer
B2C has been scaling faster. B2B takes longer to unlock, but is at least as big an
opportunity.
Page / 20
Source: Dealroom.co.
2005
2010
2015
2020
$0.5B
$1.0B
$1.5B
$2.0B
$2.5B
Enterprise value
$3.0B
$3.5B
$4.0B
Patient-facing
Monetized via deals
with payers and/or
reimbursement
systems.
Provider-facing
Investor landscape
3
European Healthtech & Biotech investors.
Source: Dealroom.co. Not exhaustive. Funds selected based on number of investments in Healthtech and (future) unicorns.
Seed
Series A
Series B+
European funds
with dedicated
Healthtech focus
Sector agnostic
European funds
U.S. / Asian
funds active in
Europe
Page / 22
European funds
that do biotech
and healthtech
European funds
with dedicated
Biotech focus
Source: Dealroom.co.
Page / 23
Investment in European healthtech startups by source of capital
Investment in European biotech startups by source of capital
2016
2017
2018
2019
2020
2021YTD
Domestic
European
cross-border
USA
Asia
RoW
Unknown HQ
56%
54%
51%
43%
44%
32%
19%
29%
19%
36%
28%
21%
9%
11%
16%
11%
12%
27%
15%
3%
10%
10%
8%
12%
2%
5%
2%
6%
2%
3%
2016
2017
2018
2019
2020
2021YTD
Domestic
European
cross-border
USA
Asia
RoW
Unknown HQ
38%
18%
31%
42%
27%
30%
32%
15%
24%
24%
23%
15%
25%
45%
36%
26%
27%
42%
4%
21%
9%
5%
18%
5%
7%
4%
1%
2%
US investors account for nearly half of investment in European health & biotech
startups.
VCs are the main contributors in funding for European healthtech and biotech
startups.
Source: Dealroom.co.
Page / 24
Investment in European healthtech startups by source of capital
Investment in European biotech startups by source of capital
2016
2017
2018
2019
2020
2021YTD
Venture Capital
Corporate VC
Corporate
Other
2016
2017
2018
2019
2020
2021YTD
67%
62%
77%
66%
58%
62%
11%
5%
7%
7%
6%
5%
10%
30%
8%
22%
13%
11%
12%
3%
9%
6%
22%
22%
72%
70%
64%
81%
60%
60%
3%
6%
2%
3%
5%
6%
6%
8%
18%
7%
15%
14%
19%
15%
16%
9%
20%
22%
Venture Capital
Corporate VC
Corporate
Other
Exciting things are happening at the intersection of Health & Biotech.
Digital therapeutics: software is the
treatment, requiring clinical
validation in trial and demonstrating
cost effectiveness in studies
General AI which solved a major
protein folding challenge (AlphaFold)
potentially enabling a step change in
drug discovery
Acceleration of drug discovery
using AI identifying new
targets, mutations, etc
Page / 25
Healthtech
Software
Biopharma
Biochemical formulas
Accelerating clinical trials. Establishing efficacy
earlier (e.g. in phase II with 100-200 patients vs.
Phase III with 1,000 patients)
Better insights in patients beyond the
clinical trial phases, improving
transparency towards payers
Improving patient selection, thereby reducing the
need for large patient cohorts
✔ Better alignment between biopharma, providers, payers
✔ Faster development of treatments
✔ Better data on (cost) effectiveness
Source: Dealroom.co.
Graduation rates between rounds
▊ Biotech ▊ Deeptech ▊ Healthtech ▊ Other startups
Source: Dealroom.co.
Page / 26
2nd round
3rd round
4th round
36%
32%
28%
24%
15% 15%
12%
6%
4%
6%
5%
12%
Seed round
Graduation rates of Biotech startups are higher initially, and then fall in line with
Healthtech and the broader market.
2
years
3
4
5
6
7
8
years
5
10
15
20
25
30
35
40
45
Years since Seed round (median)
Round size in $M (median)Time between rounds and amounts raised
▊ Deep tech ▊ Tech startups ▊ Biotech ▊ Healthtech
5
3
2
2
2
4
3
4
5
Deep tech
Tech
Biotech
Round 2 means the round after
seed round (considered first)
For tech startups, the first
follow-on round over $4M
happens 1.5 years after seed
round but for biotech and
healthtech, 2.2 and 2.6 years,
respectively.
5
4
3
2
3
5 Healthtech
4
Page / 27
It takes (a bit) more time and capital to build a healthtech and biotech startup.
Source: Dealroom.
Convergence of Bio & Healthtech bodes well for hubs that are strong in both.
Basel, Leiden,
Lausanne, Dublin
Cambridge, Oxford,
London, Munich
Paris, Stockholm,
Berlin, Barcelona,
Zurich
Healthtech
Clusters (startups,
investors, academia)
Page / 28
Biotech clusters
(startups, investors, academia)
Source: Dealroom.co.
European healthtech: 13 unicorns and 40 future unicorns (57% in UK+France).
Page / 29
Unicorns
Future Unicorns
European Healthtech unicorns and future unicorns
7
United Kingdom
10
3
France
1
Germany
20
1
Switzerland
6
Belgium
3
5
1
Sweden
3
2
Ireland
2
1
Netherlands
2
1
Poland
1
1
Russia
1
1
Finland
1
1
Spain
1
13
7
5
4
1
1
Source: Dealroom.co.
European biotech: 31 unicorns and 51 future unicorns (40% UK+France).
Page / 30
European Biotech unicorns and future unicorns
8
United Kingdom
10
1
France
Germany
24
5
Switzerland
9
Denmark
3
9
4
Netherlands
8
3
Belgium
7
3
Ireland
7
2
Sweden
3
1
Spain
2
1
Iceland
1
1
Italy
1
16
9
4
4
3
1
5
4
5
Unicorns
Future Unicorns
Source: Dealroom.co.
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