In the United Kingdom, the healthtech sector has experienced a rapid growth in investment, with investment skyrocketing from a mere $420 million in 2016 to a staggering $3.8 billion in 2021. This impressive trajectory puts the UK third globally in healthtech investment, just behind China’s $4.1 billion investment in the sector. Despite challenging macroeconomic conditions, investment in healthtech is projected to continue its upward trend in 2023, and this year could prove to be a turning point for healthtech investors in the UK. With investment and innovation both higher than ever before, the conditions are ripe for the UK to become the ‘healthtech Silicon Valley’ of Europe.
The golden triangle
The UK’s ‘golden triangle’ of Oxford, Cambridge, and London has positioned the UK to become a healthtech leader, acting as hubs for growth and innovation. Tech giants like Amazon and Google that have expanded their healthtech operations in the US are now setting their sights on the UK market. Already, the ‘golden triangle’ is home to 508 healthtech startups backed by venture capital investors from across the world. This global support demonstrates the centralisation of the international healthtech market around the UK.
The UK’s world-class universities and research institutions, particularly those in the golden triangle of Oxford, Cambridge, and London, provide a steady stream of highly skilled talent and groundbreaking research, allowing innovative sectors filled with skilled workers, such as healthtech, to thrive.
Additionally, the Government has lent its support to the growth of the healthtech sector, providing increased funding to universities and SMEs for research and development. Other various policies and initiatives, such as the implementation of digital transformation projects and investing in innovative technologies are helping to improve patient care and streamline operations. This collaboration between academia, industry, and government fosters a vibrant ecosystem where cutting-edge ideas can be transformed into commercially viable products and services.
Sustained healthtech opportunities
A variety of challenges, including staffing issues, a growing Covid-19 backlog, an ageing population, and rising costs, have all exacerbated the difficulties faced by the UK’s healthcare system, with supply unable to meet the massive demand. And big challenges, need big answers – answers that can deliver lasting change and robust returns. With spending on cloud, digital, and cyber technologies increasing by nearly 50% year-on-year, healthtech looks to be a long-term, reliable investment.
In fact, the UK’s healthtech sector has attracted substantial investments from both domestic and international investors, as demonstrated by the increase in venture capital funding for healthtech startups (up 280% globally between 2016 and 2021). In addition, the presence of numerous accelerators, incubators, and innovation hubs throughout the country provides healthtech companies with access to the resources and networks needed to scale their businesses successfully, setting the sector up for success and vast opportunity.
Modernising primary care
Recently, the opportunity within the pharmacy sector specifically has rapidly grown as healthtech firms seek to modernise the UK’s strained primary care system. Health Secretary Steve Barclay is pushing for a “pharmacy first” policy, and has been vocal in his support of creating opportunities for pharmacies to generate new revenue streams. This shift presents a chance for healthtech companies and investors that support them to be at the forefront of a historical change in the country’s health system.
Digitisation is everywhere: the Covid-19 pandemic has accelerated the adoption of telemedicine and remote healthcare solutions, as patients and healthcare providers seek to minimise in-person visits and reduce the risk of infection, and similar solutions can be applied in pharmacies – solutions which investors recognise the social and financial value in.
Tech startups, such as Charac, are developing technologies that can help increase pharmacy revenue as well as improve the efficiency and quality of care of pharmacies. Booking and conducting online consultations, as well as digitising the ordering and delivery of medications help streamline pharmacy services, freeing up pharmacists to conduct revenue-boosting work.
Thanks to a combination of factors, including a supportive government, a robust investment environment, a strong talent pool, world-class research institutions, and a growing demand for innovative healthcare solutions, the UK is on the cusp of becoming a global healthtech leader. As healthtech investment continues to rise in 2023, innovative tech companies are well-positioned to contribute to the UK’s burgeoning healthtech ecosystem.
