Edition 1 — April 7, 2021
Welcome to the first edition of the MedTech Pulse newsletter. Great that you are here to explore the fascinating intersection of technology and medicine with us.
Every two weeks, you will get unique perspectives on major news, insights from the startup ecosystem, evocative infographics, and inspiring conversations with the people behind the innovation.
If you want to learn more or have feedback, feel free to reply to this email. We look forward to hearing from you.
In this edition, you will find
our thoughts on the consumerization of the hearing aid market,
an analysis of medical patents at GAFA companies, and
an interview with the CEO of Ada Health.
The consumerization of the multi-billion dollar hearing aid market
Illustration by Mary Delaney
Apple's AirPods are a technology platform in their own right. They're not just for listening to music anymore. With iOS 14, Apple introduced Live Listen, enabling customers to use their iPhone as a remote directional microphone. Thus, AirPods can provide some functionality that you might expect from a hearing aid: personalized amplification plus noise cancellation to facilitate hearing those around you.
→ The consumerization of the previously highly isolated hearing aid market through the rise of smaller and smarter earbuds is opening up many opportunities. For startups and hearing aid companies, but also for underserved customers who experience hearing loss, but not at a severe enough level to attract the attention of mainstream innovation. As in many other areas, the consumer electronics industry and the professional medical device industry are merging. The key question will be who has the advantage in this asymmetric competition: The high-tech acousticians who build expensive individualized high-tech hearing aids or consumer electronics players with cheaper, software-powered devices?
This is a welcome development, as consumers of hearing aids have long expressed frustration with the high cost and complex care involved in treating hearing loss. The WHO estimates that by 2050 nearly 2.5 billion people will be living with some degree of hearing loss, at least 700 million of whom will require rehabilitation services.
Everlywell expands at-home lab testing service and banks on post-pandemic growth
At-home health testing startup Everlywell has acquired PWNHealth and Home Access Health. To reflect the evolution into a multi-faceted health business, the parent company has been rebranded as Every Health. Previously, Everlywell maintained a partnership with PWNHealth, which operates a diagnostic testing clinic network. Terms of the deal were not disclosed, but Bloomberg reported that the Blackrock-backed startup is valued at $2.9 billion after the acquisition. The Texas-based company was founded in 2015 and has grown to offer more than 35 at-home lab testing kits for food sensitivity, fertility, STDs, thyroid function, metabolism, vitamin D levels, and inflammation. During the COVID-19 pandemic, the startup experienced strong growth, with sales increasing 300% last year.
and other players (like Finland-based Nightingale) challenge the established blood diagnostics value chain. Currently, blood tests have to be prescribed by physicians, which are billed per test. This results in high costs when a comprehensive picture is needed. With a direct-to-consumer approach along with broad-spectrum analysis, Everlywell and Nightingale not only connect directly with consumers but also provide them with a bird's eye view of their health.
Everlywell is now counting on increasing consumer demand for affordable testing to continue long after pandemic periods. Julia Cheek, CEO, and founder of Everlywell and Everly Health, said in a statement, that "the pandemic significantly accelerated the growth of consumer-friendly lab testing within the $85 billion testing market, resulting in a watershed moment for all aspects of diagnostics. People now expect affordable, high-quality, and easy diagnostic testing more than ever before".
Biotech and medical startups in the spotlight at Y Combinator demo day
Y Combinator is one of the most well-known American startup accelerators, with early-stage funding support in companies like Stripe, Airbnb, DoorDash, Coinbase, Dropbox, or Twitch. This year, biotech and medical startups had a strong presence at Y Combinator's recent demo day, continuing the trend of Y Combinator accepting an increasing number of non-bits and bytes innovators.
→ Y Combinator's batches are a good proxy for things to come. The MedTech and biotech sectors are increasingly welcoming startups as advances in technology and software break down insurmountable barriers. It will be fascinating to see how technology-driven startups will tackle the big and difficult healthcare problems. At the same time, it remains to be proven whether the Silicon Valley blueprint can be applied to biotech and MedTech. Silicon Valley favors founder-driven companies that rely on a founding team to adapt its core technology to fit the market. But the “move fast and break things” mantra doesn't work in highly regulated areas where it's crucial to avoid mistakes.
Atom Bioworks develops a programmable DNA machine for antiviral precision medicine. LiliumX works on a modular protein platform designed to facilitate the scalable discovery of bi-specific biologics. Entelexo Biotherapeutics focuses on the treatment of immune-mediated diseases with a new class of drugs which include extracellular vesicles that are derived from stem cells. Nuntius Therapeutics works on ways to deliver cell-specific DNA, RNA, and CRISPR-based therapies. The goal of Trestle Biotherapeutics is to get kidney failure patients off dialysis with implantable lab-grown kidney tissue.
Have a look at the 36 healthcare companies from Y Combinator's Winter 2021 batch at their Startup Directory.
Healthcare is one of the largest and fastest-growing industries in the world.
It takes more than 10% of the GDP of most developed countries and the healthcare sector is the US’s largest employer. So it's no wonder that the big tech giants want to get into this market.
To understand which tech company is pushing the hardest into the market, we looked at their patent applications in healthcare and medicine. Apple is the clear leader and well-positioned with a device like the Apple Watch and a strong privacy focus.
For our first edition of Medtech Pulse, we caught up with Daniel Nathrath, CEO and Co-Founder of Ada Health, to talk about the future of healthcare to see how he explains his job to a five-year-old and why the Spitzenverband Digitale Gesundheitsversorgung deserves more attention:
“If we get a diagnosis faster with the help of AI - regardless of income, LOCATION, or STATUs - we will changE the face of medicine“
Daniel Nathrath, CEO Ada Health
Olive Union, a Tokyo-based smart hearing aid startup, raised a $7 million Series B led by Beyond Next Ventures, Bonds Investment Groups, and Japan Policy Finance Corporation. Olive plans to ship its new FDA-registered smart hearing aids later this year.
YAHOO FINANCE (2021-04-05) ↗
StimScience, a Berkeley-based neuroscience startup, raised a $6 million seed financing round led by Khosla Ventures. StimScience has prototyped its first consumer device, focused on using brain stimulation to improve sleep health.
StimScience (2021-04-05) ↗
BrightInsight, a California-based company that helps drug and device makers build digital tools, raised a $101 million Series C investment round led by General Catalyst. The investment round values the 2017-founded company at about $750 million.
Bloomberg (2021-03-30) ↗
Vibrant, a medical technology startup based in Tel Aviv, has raised a $7.5 million Series E led by Unorthodox Ventures, with participation by Sequoia. The company developed a disposable vibrating pill to treat chronic constipation via mechanical stimulation of the gut.
TECHCRUNCH (2021-03-26) ↗
Toronto-based 7D Surgical, which develops optical technologies and algorithms to improve surgeries, is set to be acquired by SeaSpine for $110 million. SeaSpine is a global medical technology company focused on surgical solutions for the treatment of spinal disorders.
GLOBENEWSWIRE (2021-03-22) ↗
Technology-driven medicine has made enormous progress. We live in a world of wonder, and I'm grateful to be a part of it. I came across a remarkable article that reminded me about the importance of putting the human in the center of our work.
In his article “How to Build an Artificial Heart”, Joshua Rothman asks why the decade-old technology hasn’t been perfected. It highlights a typical drawback of our high-risk industry:
Either you implant an immature device or you chase perfection and your product never leaves the lab.
Moreover, artificial hearts face another unique challenge: Only those confronting imminent death are willing to use today’s models.
That innovation for innovation's sake is an important part of progress. But it's about us and our relationship with technology. We must use it, work with it, and live with it. That's why we should put the human at the center of our efforts.
That's it for this week. If you liked it, share this newsletter with a friend or colleague.
Take care and see you in two weeks!