Investing in Digital Health Startups

Healthcare represents 18% of the U.S. economy, yet it is one of the last sectors to undergo technology-based transformation. Digital health represents the convergence of healthcare and technology, with the aim to improve access to care, reduce inefficiencies in healthcare delivery, lower costs, enhance the quality of patient care, make treatments more targeted and personalized, and empower consumers to better manage their own health and well-being. In recent years there has been an explosion of new digital health startups focused on these key objectives. Digital health has become the bellwether of venture funding, outgrowing both traditional healthcare and technology sectors. Venture funding in this category exceeded $29 billion in 2021, double the previous year and a 2,325% increase from 2011. This course will analyze the unique characteristics and strategies of digital health companies as students form groups to act as venture capitalists and develop investment memos for real companies that are pitched by their founders. Past companies that have been pitched in this course— Maven Clinic, Grand Rounds (Included Health), and Simple Health— have gone on to become high-growth, billion-dollar companies. Students will analyze key objectives of new businesses and determinants of success including unit economics, product differentiation, go-to market strategies, customer acquisition, marketing tactics, scale-up/growth opportunities, and other business optimization approaches. The course will allow students to hone their investment skills including questions to ask during an entrepreneur’s pitch, developing an investment thesis, and how to structure and write an investment memo. This course will address these issues through a mixture of lectures, case studies, and guest speakers (entrepreneurs and investors) from the digital health sector.