London becomes top hub for healthtech, investments increase to $1bn
As per the latest data from London & Partners and Dealroom, the UK and US are driving forward the rapid growth of the global healthtech sector. It shows that the $51.3 billion funds have been pumped into global healthtech startups in 2021. Notably, this is up from 280 percent in 2016.
The findings have been released to coincide with this week’s Silicon Valley Comes to the UK event series, thereby bringing together investors, entrepreneurs and CEOs from the UK and the Bay Area both physically and virtually to discuss the role of technology in building a better future and solving the great challenges of our time.
Growth of UK’s healthcare sector
The pandemic has acted as a catalyst to an already growing healthtech sector and investment has reached record highs in 2021. The US leads globally with $31.9 billion in VC investment so far this year, while the UK comes in third with $3.8 billion, which is close behind China’s $4.1 billlon. The UK healthtech investment has risen from just $420 million in 2016, which is an increase by nine times while US investment has increased by 3.4 times.
The new findings reveal that UK healthtech growth is being driven primarily by the Golden Triangle of London, Oxford and Cambridge, a region home to five universities in the world’s top 25 for life sciences and medicine1 and a world-leading hub for research and development.
Total VC investment for these three key city clusters between 2016 and 2021 YTD is $5.7 billion, accounting for over 25 percent of European healthtech investment and 65 percent of the UK’s over this time period. London healthtech startups secured $2.9 billion in funding while Oxford’s attracted $2.2 billion and Cambridge’s $600 million.
London, the new hub for investments
Europe is now the fastest-growing region globally for healthtech according to the findings, with European healthtech startups raising $8.1 billion in 2021, up from $1.7 billion in 2016 and growing at a rate of 4.9 times In Europe, London is the leading hub for healthtech investment. The fastest-growing subsector in London is remote monitoring and wearables, raising $345 million so far this year, which is up from $17 million in 2016, an increase by 20 times.
Some of the largest rounds this year involving monitoring and wearables companies include a $130 million Series C for Huma and a £58 million Series C for femtech company Elvie. Other fast-growing healthtech subsectors in London include drug development with AI, home tests startups and digital health insurance.
Laura Citron, CEO at London & Partners, London’s business growth and destination agency said: “Coronavirus has accelerated the use of tech and innovation to address human disease and health. Today’s findings demonstrate that the UK and US are leading the way for innovation in this sector and tech hubs like London, the Bay Area and New York are key partners for collaboration. The UK’s Golden Triangle is home to world-class universities for life sciences and medicine, a deep research and development landscape and dedicated funding and government support. These factors make London, Oxford and Cambridge a world-leading innovation hub for life sciences and healthtech.”
Neelam Patel, CEO of MedCity, the life sciences cluster organisation for London said: “Like Silicon Valley, London is a hub for AI and data programming expertise. When you combine this with the city’s academic excellence in life sciences and the UK’s actively evolving regulatory environment and unrivalled dataset, it helps to explain why London has become a world leader in healthtech. There are synergies between the UK and US markets in this respect, so we are seeing UK companies establishing a presence in the US, and US companies moving to the UK to grow in the healthtech space.”
Matthieu Vallin, health investor at Octopus Ventures, said: “It’s an incredibly exciting time to be a health investor in London, with remarkable innovation wherever you look. This is partly due to the volume of top talent across healthtech, deeptech and biotech all converging to create category-defining companies. We’re also lucky to have lots of brilliant incubators, early-stage investors, and growth funds, which help startups build their product, grow at pace, and then keep scaling into bigger markets such as the US, which is something we focus on with our own portfolio. More than ever before, founders have the ambition to build global health companies from Europe, and they now have talent and capital to make it happen.”
Dr. Mridula Pore, Co-Founder and Co-CEO of London-based healthtech startup Peppy said: “In the UK and in the US, the pandemic has exacerbated key trends that support the traction of health tech startups like Peppy. Firstly, we’ve proven that it’s possible to work and access healthcare remotely. Secondly, employees have started to value their health and wellbeing more highly, and employers have recognised that investment in wellbeing is paid back in improved productivity and retention. Finally, we’ve seen gaps in the healthcare market widen, particularly around family, reproductive and gender-specific health.”