Digital health care — which promises to transform medical treatment and diagnosis by using new technology — has captivated investors in recent years, attracting $16.8 billion in funding at the height of the COVID-19 pandemic in the spring of 2021. But over the past year, amid inflationary pressures and supply chain problems, investing in the sector cratered, falling 72% from its peak in 2021, according to the latest State of Digital Health survey by CB Insights.
Despite those headwinds, family offices remain largely interested in the sector, with investors around the world making major plays through venture capital and direct investments.
“Since COVID, there has been a general increase in digital health care interest across the entire investment landscape,” said Dennis Caulfield, vice president of research at FINTRX. “And family offices, particularly those making direct investments, certainly participate in this overarching trend.”
Hey Jane, a virtual clinic that offers telemedicine abortion care, has seen a surge in investing from family offices before and after the U.S. Supreme Court’s Dobbs decision overturning Roe v. Wade this past summer. The company currently operates in seven states: California, Colorado, Illinois New Jersey, New Mexico, New York and Washington.
“We’ve definitely seen an increase in interest,” said Hey Jane founder and CEO Kiki Freedman, adding that family offices have invested several million dollars in the startup. “Their motivations are definitely grounded in the mission to increase health care access, but they also clearly see the business opportunity for this to be a large, sustainable enterprise.”
One of those investors was Denlow Private Trust, a single-family office based in Bermuda. Denlow has made other investments in digital health care, including a fitness tracker company in India and an in-vitro fertilization clinic in Boston that uses advanced technology to measure which egg has the most mitochondrial activity.
“In general, it’s about transforming health care, which is a very inefficient sector,” says Philip Bickerton, Denlow’s chief investment officer. “There’s a huge opportunity to bring it into the 21st century. Digital health care is possibly one of the most exciting sectors to be in.”