UK Leads EU in Driving Global Growth In HealthTech Sector

Following extended lockdowns and widespread disruption in social services, people have been seeking alternative ways to access health services, leading to an increased use of technology and innovation in healthcare provision.

As a result, investments in global health technology startups have skyrocketed this year, hitting $51.3 billion, a staggering 280% increase from 2016 levels, according to recent data from London & Partners and Dealroom.co.

One of the countries driving this growth is the United Kingdom, which has the second-highest number of HealthTech companies that have received funding since 2016 (1,090), behind the United States (6,551).

The country is also the largest recipient of venture capital (VC) investment in Europe so far this year ($3.8 billion) but came in third globally behind the U.S. ($31.9 billion) and China ($4.1 billion).

In terms of investment growth rate, however, the U.K. beat the U.S., given that U.K. investment grew at a rate of nine times between 2016 and 2021, while U.S. HealthTech investment increased by only 3.4 times.

The findings further revealed that U.K. HealthTech growth is concentrated mainly in London’s Golden Triangle, an unofficial grouping of leading research universities in the southeast region of England, including Cambridge and Oxford.

The world-leading hub for research and development is home to 508 HealthTech startups that have been backed by VC investors between 2016 and 2021, with three key city clusters (London, Oxford and Cambridge) receiving 65% of the U.K.’s total HealthTech investment and over 25% that of Europe’s.

According to Laura Citron, CEO at London & Partners, a trade, investment and promotion agency for London, “the UK’s Golden Triangle is home to world-class universities for life sciences and medicine, a deep research and development landscape and dedicated funding and government support. These factors make London, Oxford and Cambridge a world-leading innovation hub for life sciences and healthtech.”

Neelam Patel, CEO of MedCity, the life sciences cluster organization for London, added that London is a hub for artificial intelligence (AI) and data programming expertise, much like Silicon Valley and when that is combined with “the city’s academic excellence in life sciences, the UK’s actively evolving regulatory environment and unrivalled dataset, it helps to explain why London has become a world leader in healthtech.”

Patel added that there are synergies between the U.K. and U.S. markets in this regard, as evidenced by the number of U.K. companies establishing a presence in the U.S. health technology space, and U.S. companies moving to the U.K. to do the same.

Read more: Digital Health Startups Making Major Moves Across UK, Europe and Africa

An example of a U.K.-based company making moves across the pond is medical startup Babylon Health, one of the world’s fastest-growing digital healthcare companies, which launched its virtual doctor consultations and AI interactions service in the U.S. in January 2020.

Last month, the startup, founded in 2013, was valued at about $3.5 billion after it began trading on the New York Stock Exchange (NYSE). And in its first earnings call as a public company earlier this month, the firm announced that about 100,000 people in the U.S. use its AI-powered medical chatbot service, managed directly through the Babylon 360 platform.

See also: UK’s Babylon Health Sees ‘Huge Demand’ in US Driven by Unique, Digital-First Solution

The fact that the startup faces very little competition in the U.S. HealthTech space is also likely to boost its growth there.

This is “partly because most of our competitors are brick-and-mortar first, and therefore it’s much more difficult for them to roll out across 60 out of the 62 counties in New York, … where we could deploy our services in a matter of weeks as opposed to building clinics, which would have taken years,” Dr. Ali Parsa, the company’s CEO and founder, told analysts on a call.

Overall, Europe emerged the fastest-growing region globally for HealthTech investment since 2016, raising $8.1 billion in 2021, up from $1.7 billion in 2016.