Edition 13 — September 22, 2021
Good morning. 

When we launched MedTech Pulse five months ago, we published the first version of the MedTech 50, our handpicked list of the 50 most valuable MedTech startups. 

Now, we updated the list and see several changes. Some companies have gone public in the recent IPO/SPAC craze, and lots of new companies have entered the ranking. But more on this in the next edition... 

For today we have some other exciting topics:
  • Why FemTech is not only important, but a booming sector
  • How Amazon is attacking the healthcare market from three sides at once
  • Which country is the global leader in MedTech patents
As always, feel free to get in touch by replying to this email, or by contacting us on LinkedIn.

And now, on to our biweekly take on the fascinating world of MedTech.

MedTech finally cares about women’s health

Illustration by Mary Delaney

In the last few weeks, two so-called FemTech companies, Tia (primary care) and Flo (period tracking), have raised significant investment rounds. Reason enough for us to take a closer look at this market. 
The term FemTech was introduced to the world five years ago by Ida Tin, founder of period tracking startup Clue. She used it to describe software, diagnostics, products, and services that use technology to support women's health.

The FemTech market is extremely diverse and includes various women's-specialty health topics, including period tracking (e.g., Clue, Flo), birth control (e.g., Natural cycles, Ava), maternal care (e.g., Elvie, Ruth Health), menopause (e.g., Grace Cooling, Stella), period products (e.g., Thinx, Callaly), and pelvic floor health (e.g., Comet, Renovia).

The FemTech segment is expected to grow 16% year-on-year over the next few years—significantly faster than the overall healthcare market. By 2027, the global FemTech market is projected to be worth $60 billion. More and more startups are entering the market, which, in Q1 2021, was the fastest growing healthcare startup category.

→ The FemTech boom is not unfounded. In fact, many aspects of female health are simply underrepresented. For example, over 70% of women do not treat their symptoms of menopause

→ The underrepresentation of women's needs in the healthcare industry is primarily a result of the still persistent low proportion of women in leadership positions, in research, and as founders. Various studies have shown that individuals typically develop innovations for their equals. In other words, men develop solutions for male health problems.

→ For companies, there is great potential not only in addressing female health issues but also in more generally orienting products and offerings to the needs of women. 

Amazon's three-sided attack on the healthcare market

Image: Amazon

It's no secret that the biggest tech giants—Google, Apple, Microsoft, and Amazon—are all keen to break into the healthcare market. Yet each one is pursuing a different strategy. Apple is centering on health data collection via the Watch. Microsoft's approach also looks fairly straightforward, with a focus on the healthcare cloud business. Google, meanwhile, recently made headlines with the dissolution of its own health division. It has a less specific focus, offering more of a bouquet of health solutions. 

At first glance, Amazon's activities in the healthcare market appear messy. The purchase of an online pharmacy, the development of a fitness wristband, the operation of a health program for employees, and an accelerator for healthcare startups are just a few examples from recent years. 

A closer look reveals that Amazon aims to enter the healthcare market on three levels: consumer, employee, and provider. To achieve this, Amazon is using a number of strategies that have already helped the company in other markets.

To date, Amazon's biggest bet in the consumer market is building a pharmacy. To make this big, Amazon is relying on the all-purpose subscription service Prime, its most important strategic instrument in the end customer market. Prime members get their medications delivered for free. 

Amazon is also targeting employers. In the U.S., the world's largest healthcare market, they face a major problem. Nearly 90% of business leaders say that healthcare costs will be unaffordable in the next 5-10 years. As one of the largest employers in the U.S., Amazon has developed the Amazon Care health program for its employees—and they are now opening up this offering to other employers. The approach of building up an infrastructure and then offering it to other companies is a frequent pattern in Amazon B2B business models such as cloud or logistics. Currently, the company is still partnering with healthcare providers for Amazon Care, but at some point this could change (especially given Jeff Bezos's mantra "Your margin is my opportunity").

Last but not least, Amazon is also targeting providers with its cloud service AWS. In the wake of the digitization of hospitals, this market is growing immensely. Amazon is currently lagging behind Microsoft here, but the giant is trying to catch up—with a marketplace strategy that has already made the company the world's largest retailer. Later this month, Amazon will unveil the 10 startups that form the first cohort in its AWS healthcare incubator program, a four-week intensive course designed to help prepare established but relatively small health tech companies for listing on AWS. If Amazon is successful here, the company could become a gatekeeper for the entire medical technology sector. 

→ It is clear that this market is not going to be easy for Amazon to win. And yes, many of the tech giant’s activities in the healthcare market have amounted to nothing. But if they are successful, the impact on the market—and on the companies—is gigantic. So everyone in the MedTech ecosystem should at least consider what Amazon's strategy could mean for them.

What if our smartphones could smell diseases?

Image: Unsplash

In a moment of synchronicity (more likely a frequency illusion), we stumbled upon the field of robotic noses twice last week. This led us down a fascinating rabbit hole.

First, our interview guest Dr. Sven Jungmann told us how important the field of sensing will be in the near future. Not only in terms of healthcare-related physical sensors and actuators, but also in terms of detecting patterns in audio and video streams and, what surprised us the most, in terms of detecting patterns in odors and scents. Check out his interview below.

A few hours later, we spotted a fascinating article in our streams about a couple of MIT researchers who want to put a nano mini-olfactory system in our smartphones. Earlier this year, the researchers presented a robotic nose that was able to detect prostate cancer from urine samples with 70% accuracy. This is roughly equivalent to the accuracy of trained dogs. According to the research, the nano nose is 200 times more sensitive than a dog’s nose when it comes to detecting and identifying tiny traces of different molecules emitted from the human body. Combined with lots of data and pattern recognition algorithms, the team hopes to train future algorithms to detect molecule sensation patterns that could point to diseases.

→ Cancer has a smell—and we can learn what it smells like! The idea is so simple, but the implementation of this process remains challenging. We don't even fully know how biological noses work (our best bet at the moment: quantum mechanics). Smell is very subjective, so until recently it wasn’t considered a reliable diagnostic method. And if smell technology has been consistent about one thing over the years, it’s been the failure to deliver on its promises. But the MIT researchers are optimistic that dog-replicating nano noses could be part of millions of smartphones within a few years. And even if we can’t reduce the price and size of artificial noses, medical devices always scale better than dogs. 

→ Certainly, robotic noses would not only be used in healthcare. Just think of all the potential applications in the waste management sector (water contamination), in retail (rotten food detection) and food production (flavor enhancement), and even in the law enforcement sector (explosives or drug detection). Once this technology becomes ubiquitous, the world will be a different place. Yes, smelling is hard. But startups like Aromyx, and Koniku, Aryballe, and Owlstone Medical (mentioned in our Deals section) show us its manifold possibilities. Because the future smells—and that's a promising thing. 

Recent research studies show that medical technology is this year’s most patented technical field for newly registered inventions. This is a strong indicator of how much exciting innovation is currently in the making when it comes to accelerating human progress at the intersection of medicine and technology.

Interestingly, the majority of newly filed international medical patents have been registered by companies located in the United States, including Medtronic and Johnson & Johnson, who are clearly leading the pack. Asian powerhouse China comes in second. 

This is contrary to global patent filing trends across all fields and industries. According to the U.N. patent agency, China was the biggest source of applications for all international patents in 2020, for the second consecutive year, thereby extending its lead over No. 2 filer the United States, with a 16.1% year-on-year increase (versus 3% for the U.S.).

Also interesting: Germany is the leading European country when it comes to patent filing activity in the medical context. However, this may soon change, as several countries—especially Korea and Switzerland—have massively accelerated their medical patenting activity in recent months, with both countries having filed more than a quarter of all their patents since 2011 in the last 24 months (compared to less than 20% for Germany).

Dr. Sven Jungmann is a former practicing medical doctor and the current Chief Medical Officer at FoundersLane’s health practice. He sits on the advisory board of Wellster Healthtech and Halitus and has his own startups including a medical education gamification company. He also has degrees in Public Health (Master, LSHTM), Public Policy (Master, Oxford), and Entrepreneurship (Postgraduate Diploma, Cambridge). 

The transition from reactive to proactive care will profoundly change the way we deliver healthcare.

Sven Jungmann (Chief Medical Officer, FoundersLane)

Series A
Medical imaging
Contextflowan Austria-based medical image analysis startup, raised a second closing of its now €6.7 million Series A funding round. The startup develops deep learning-based software to improve radiology workflows, saving radiologists time while improving reporting quality. (2021-09-07) ↗
Series D
InBrace, a 2014-founded developer of Smartwire, an orthodontic device designed to align teeth discreetly, ​​raised $102 million of Series D venture funding in a deal led by Farallon Capital Management. 
PRNEWSWIRE.COM (2021-09-08) ↗
Series D
Breath biopsy
Owlstone Medical, developer of breath biopsy products designed to help in the early detection of cancer, inflammatory, and infectious diseases, raised GBP 43.77 million of venture funding from undisclosed investors. (2021-09-07) ↗
Series E
Artificial organs
Emulate announced an $82 million Series E through the combination of debt, Series E1, and Series E2 venture funding in a deal led by Northpond Ventures. The company works on organ-on-a-chip platforms that emulate human biology, with the goal of understanding how different diseases, medicines, chemicals, and foods affect human health.
EMULATEBIO.COM (2021-08-07) ↗
Series B
Medical devices
Francis Medical raised $55 million in Series B equity funding led by Solas BioVentures. The company works on novel therapeutic solutions to treat prostate, kidney, and bladder cancer.
FINSMES.COM (2021-09-16) ↗
Series B
Erectile disfunction
Numan, operator of an online clinic tackling erectile dysfunction problems, raised GBP 33.9 million of Series B venture funding in a deal led by White Star Capital. The funds will be used to help the company accelerate its expansion in new geographies.
TECHCRUNCH.COM (2021-09-13) ↗

Last week, the Wall Street Journal published a report (paywall) on the negative effects of Instagram on the mental health of teenage women. The problematic effect of social media is nothing new and has been proven time and again by researchers. It's no wonder that many Silicon Valley CEOs are trying to let their children grow up without the services their companies have developed.

What was truly new about the story is that Facebook has long had tangible evidence of Instagram's negative effects yet downplayed it in public. Consequently, the article has led to great criticism of Facebook around the world, even if no one was completely surprised. 

The story reminded me once again how important it is to have a deep sense of responsibility in our professional life. As a physician, I am committed to the Declaration of Geneva, a pledge of my dedication to the humanitarian goals of medicine. The declaration has its origins in the Hippocratic Oath, and in its latest version from 2017, it reads as follows:

As a member of the medical profession,

  • I solemnly pledge to dedicate my life to the service of humanity;
  • The health and well-being of my patient will be my first consideration;
  • I will respect the autonomy and dignity of my patient;
  • I will maintain the utmost respect for human life;
  • I will not permit considerations of age, disease or disability, creed, ethnic origin, gender, nationality, political affiliation, race, sexual orientation, social standing, or any other factor to intervene between my duty and my patient;
  • I will respect the secrets that are confided in me, even after the patient has died;
  • I will practice my profession with conscience and dignity and in accordance with good medical practice;
  • I will foster the honor and noble traditions of the medical profession;
  • I will give to my teachers, colleagues, and students the respect and gratitude that is their due;
  • I will share my medical knowledge for the benefit of the patient and the advancement of healthcare;
  • I will attend to my own health, well-being, and abilities in order to provide care of the highest standard;
  • I will not use my medical knowledge to violate human rights and civil liberties, even under threat;
  • I make these promises solemnly, freely, and upon my honor.
I am inspired by the Declaration of Geneva not only as a physician but also as a CEO. Of course, the role of the physician remains a special one. Yet today, unlike in the time of Hippocrates, it is no longer just doctors who care about people's health.

Therefore, what should drive all of us in the MedTech ecosystem is not only enthusiasm for innovation and progress, but also a deep sense of responsibility.