Starting any new business requires everything from operational capacity to pure determination and resilience that pushes you to keep going when things go wrong. However, arguably the most important resource of all is money, which, more often than not for startup companies operating in the digital health sphere, is secured through investment.
After the lows of the COVID-19 pandemic, where funding fell to just $6 billion during the first half of 2023, the digital health fundraising market is finally beginning to stabilize. In fact, according to US market research, wellness startups raised $65.7 billion in investments across 266 deals in the first 6 months of 2024.
This research also indicates that the average venture capital deal size has increased by 17%, reaching $14.4 million compared to $12.3 million last year. Now is the perfect time for budding entrepreneurs to secure the funding they need to develop, launch, and scale their digital health idea, using the following three strategies:
- Demonstrate Demand
To prove that your idea is investment-worthy, you’ll need to show that people are willing to pay for your product, especially in a competitive market like digital health. The industry is expected to demonstrate a CAGR of 8.49% from 2024 to 2029, resulting in a market volume of $258 billion by the end of the period.
Once you’ve developed an idea, show potential investors that it’s worthy of their hard-earned capital by getting it out there among consumers and gaining concrete evidence of the market demand. One effective strategy is to take pre-orders and generate some revenue early, which shows investors that they can expect a good return on their initial investment.
This also provides you with the opportunity to get qualitative feedback on the product through focus groups and surveys. You’ll then be able to make changes before the full launch and prove that you’re committed to helping the product reach its full potential.
Crowdfunding is another great way to demonstrate interest. This technique uses social media and dedicated websites such as Indiegogo and Kickstarter to connect entrepreneurs with investors, allowing them to raise small amounts of money from larger groups of people.
- Be Ready With Data
As a healthcare startup, there are many safety and legal standards that your product or service must meet before it can launch. Investors will want to see evidence that these regulations have been achieved before they part with their cash, especially when it comes to gaining FDA approval, for example.
You’ll therefore need to ensure that your idea has gone through the necessary testing phases and clinical trials before trying to secure any investment allowing you to properly launch and scale a product.
While pre-sales can help you generate some early revenue, they also help to see how well your idea is progressing towards a set objective, allowing you to gather key performance indicators (KPIs).
Keeping track of figures such as the number of conversions made from email newsletters or social media engagement rates can help to show the potential investment value of your product in black and white – and this is data that funders can use as evidence to firmly back their financial decisions!
- Learn From the Experts
Another great way to gain the feedback you need to make your product a success, as well as securing the necessary capital, is to connect with digital health industry experts. As the second fastest-growing company in Europe, Kilo Health is one company that can help in this area.
Their unique Co-found Program is designed to guide innovative digital health products and services from the idea stage right through to launch, in a matter of weeks rather than the years it usually takes. The program provides all of the resources that entrepreneurs could ever need to do this, including marketing support, human resources, and, of course, the required investment.
Successful applicants will become co-founders, operating within Kilo Health’s portfolio of more than 30 other digital health enterprises. Find out more on how this initiative can help you secure the capital needed to make your health startup a success on the Co-found Program website.
