Healthcare is the new Internet, asserts David Randall and Christina Farr in Reuters —at least when it comes to technology investors and their money. Venture capital firms and portfolio managers of mutual funds are starting to invest in companies specializing in analyzing healthcare data, they report—with VC funding for healthcare technology up 176 percent this year.
“This trend is yet another example of investors finding new ways to invest in the thriving healthcare industry,” said partner Geoffrey Cockrell of McGuire Woods. These investments are a good way for investors who are wary of the risk in the industry, he said. Traditionally, companies associated with healthcare, such as biotech companies, have business models that centers on the development of a drug, he continued. Unlike those companies, healthcare data is capitalizing on the growth of electronic records.
Indeed, Randall and Farr report that though there can still be just as much risk in these investments as any others, the aging population in the U.S. and Europe—and the transition to digital health records—make it a particularly appealing industry. Categories of investments include: payer administration, digital medical devices, analytics and big data, healthcare consumer engagement, population health management, and personalized medicine, said Cockrell.
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