This article is a guest post on NoCamels and has been contributed by a third party. NoCamels assumes no responsibility for the content, including facts, visuals and opinions presented by the author(s).
Dorian Barak is the founder and managing partner of Indigo Global, a boutique Israeli investment advisory firm focused on cross-border financing transactions, working with a broad array of investors, particularly in the Asia-Pacific region. Zack Fagan is an associate at Indigo Global.
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Alongside cybersecurity and telecommunications, Life Sciences has been at the forefront of the Israeli technology boom for many years, with over 50 successful exits since 2012 and more than 25 Israeli medical companies listed on NASDAQ. Boasting one of the world’s most advanced healthcare systems and the highest concentration of life science researchers and professionals per capita, the local ecosystem is continually finding new and innovative ways to treat and cure the most challenging medical conditions.
Today, driven by innovations in enabling technologies such as computer vision and smart sensors, as well as a shift in medical care towards patient centricity, the Israeli digital health sector is emerging as a bright spot of the broader healthcare industry. Although digital health is a relatively young field both in Israel and globally, it is actually one of Israel’s most rapidly growing industries and one that can have a profound impact on the world.
What is Digital Health?
Broadly defined, digital health refers to technology-enabled healthcare based on the integration of AI, big data, computer vision, digital media, sensors and smart devices with traditional medicine. Utilizing these technologies, “Digital Health” enables the provision of remote healthcare, promotes data-driven diagnostics and treatment, increases efficiency and accuracy, and facilitates highly personalized medical care.
The industry has evolved and developed swiftly over the past few years due to the increased availability and robustness of supporting technologies. For example, the advent of the smartphone has enabled a revolution in the delivery of personalized healthcare. According to a report published by Transparency Market Research, the Global Digital Health Market is expected to exceed $500B by 2025, with a CAGR of 13.4% over that time.
This growth has attracted the attention of VCs, corporates, and healthcare players alike, as companies in the industry raised a whopping $8 billion globally in 2016, with upwards of 200 new investors joining the fray. Private investment, alongside strong government support, has driven the emergence of digital health hubs around the world, from Silicon Valley to Boston, London, Berlin, Switzerland, and Israel.
The Rise of Digital Health in Israel
Israel’s digital health industry may still be in its infancy, but it is quickly maturing into one of the world’s leaders. According to a report published by Startup Nation Central, the number of digital health companies in Israel skyrocketed from 65 in 2005 to nearly 400 in 2016. Over the course of 2016, the industry saw a 27 percent increase in investment as well, reaching $183 million.
While remarkable, this growth is not surprising. It is well known that Israel excels in the development of technologies in the fields of IT, communications, mobile, vision, and data analytics – all core components of digital health technologies. This, combined with the high prevalence of digitalized health records in Israel and the enrollment of the entire population into only four health care “funds,” has served as a powerful enabler of digital health innovation.
The Israeli Digital Health Startup Map
In Israel and globally, digital health is driven not only by innovation in technology but also by a change in the philosophy of medical care. Gone are the days of “system” centric care that resulted in one-size-fits-all treatment with a generalized approach to care. The “new healthcare” is driven by increasing the efficiency, quality, and personalization of care within healthcare centers, while also shifting the care to the patient within their own homes.
In order to show how this trend and the surge in new technologies is manifested in Israel, we built the below infographic mapping the Israeli digital health ecosystem. The infographic is not comprehensive, as there are hundreds of active companies in Israel, with new startups launching almost daily. But given the rapid evolution of the industry and its complexity, the infographic provides a useful snapshot that highlights the broad solutions that Israel’s digital health companies are beginning to deliver.
As digital health in Israel continues its rise and evolution, boosted by international interest and local support, we expect it to emerge into one of Israel’s most impactful and well-known tech sectors.