Many sessions and conversations covered the challenging economic realities facing digital health companies. With sky-high interest rates, the “free money” era of digital health investing is over.
In one board, “Doom or Boom? The financial future of Digital Health,” experts said of the uncertainty in the private and public markets. Cheri Mowrey, head of US investment banking at Morgan Stanley, said she expects companies to continue listing shares in 2024. Business models from management respond to business economy,” she said.
Michael Yang, managing partner at OMERS Ventures, a venture capital firm in Palo Alto, California, said the market will get worse before it gets better. He said that founders should do whatever it takes to get through this economic downturn.
“It could mean losing colleagues or getting funding you never wanted, but you have to hold back your pride,” Yang said. “It’s ‘Survivor’ at this point. There are so many great businesses that are in the process of being conceived, created, and scaled, and now you have to recalibrate.”
Several companies exhibiting at HLTH have laid off staff in the past few months, including Calm, Noom, and TruePill.
Jonathan Bush, CEO of digital health company Zus Health, says 2021 is “the land of milk and honey”. Zus closed its Series A funding round in July 2021 for $34 million. “Now I feel relieved to get 20% off from that batch,” he said.
Scott Barclay, chief executive officer of venture capital firm Insight Partners, says that while the atmosphere at HLTH is exhilarating, economic realities are hard to avoid.
“It feels like everyone is coming to the party when [Federal Reserve] got rid of the punchbowl,” Barclay said. “The production quality of this conference is excellent. Next year it will be great too, but there may be fewer people here.”
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