Investors play a crucial role in the success of digital health solutions, contributing at every stage from early research to scaling up and commercialisation. Each development phase requires a tailored approach to attract the right kind of investment. The
European Digital Healthtech Conference, which explores challenges that hinder digital health solutions from ever reaching the market, highlighted the views of investors and public entities during a panel discussion.
“Digital health technologies are an important economic driver, especially in Luxembourg,” affirmed Martine Deprez, Luxembourg Minister of Health and Social Security. “Digitalisation brings data. Data brings knowledge. Knowledge brings innovation. But innovation brings responsibility. A responsibility that we all share.”
The investors perspective
Having an in-depth understanding of what investors look out for is essential for digital health companies looking for funding.
Bert-Arjan Millenaar, Founder and CEO of NLC Health Ventures, outlined three critical criteria: “Is this a serious solution? Can it be financed? Can you win?” These questions address the market’s estimation of relevance, financial viability, and the capacity of the innovation to withstand competition.
Digital health technologies are an important economic driver.
Martine Deprez, Luxembourg Minister of Health and Social Security
“We are humble, and we don’t always have the answers to these questions. This means that we will sometimes miss opportunities,” emphasised Mr Millenaar. “But this is not always negative: we want to have impact, and if someone else does, then it is perfect.”
NLC Health Ventures supports startups with loans ranging from €150,000 to €5 million, always aiming for a multiplier effect. The CEO highlighted the importance of resilience for startups, advising entrepreneurs to be persistent but also to recognise when it is time to pivot. While investors might express enthusiasm at first, he noted that actual investment can be uncertain and depends truly on the project's investability.
Closing the last mile: public-private partnerships
EIT Health is an EU-funded network brings together 120 partners from around the globe to drive healthcare innovation and create positive societal impact in Europe. It actively collaborates with various stakeholders to validate and demonstrate the potential benefits of AI solutions in healthcare, aligning with European initiatives such as the European Health Data Space and the AI Act.
“There's a lot of funding up until, say, the research stage. We want to offer funding that can help companies bring their technology to the market,” stated Hayley Every, Entrepreneurship Lead at EIT Health Belgium-Netherlands. “We see for example, with the Horizon Europe programmes or even national funding, that often you reach technology readiness level (TRL) 7. That's the point where we want to step in to help companies make that next step,” she continued. Supported projects are encouraged to launch on the market within one year of project completion.
We want to offer funding that can help companies bring their technology to the market.
Hayley Every, Entrepreneurship Lead at EIT Health Belgium-Netherlands.
National development bank SNCI supports the development and diversification of Luxembourg's economy. It offers medium and long-term loans, along with direct and indirect equity investments. One instrument used is the Luxembourg Future Fund (LFF) programme, initiated in 2015 with a €150 million budget. LFF 2 was increased to €200 million and includes investments in life sciences and medical technologies.
“On our credit side, we have different programmes for different maturity stages. And for the equity side, we try to support funds specialised in different fields and sectors. We have LFF for healthcare. We had the Advent Life Science Fund also for healthcare and different other multi sector funds that can invest into startups with different maturity levels,” pointed out Guilhem Davezac, Economic Attaché at SNCI.
Financing models: lessons from France
New financing models are being explored under the French innovation programme for healthcare delivery. Out of the 144 pilots worth around €540 million for the 2012-2028 period, 54 concern digital or health products: 26 medical devices, 24 digital pilots without medical devices.
“It's better to have first results that shows that the technology and all the care pathway is promising. Then we look at the impact for patients, for health professionals and for the whole health system,” underlined Natacha Lemaire, Rapporteur General at the French Ministry of Health. As part of the programme, France is exploring new funding methods such as bundled payments to support healthcare technologies.
Market expansion still a criteria
“When we take on working with a company, obviously we have its expansion in mind,” mentioned Fabienne Roussel, Partner at Vesalius Biocapital IV. However, its main investment approach centres on addressing medical needs realistically, ensuring the product’s development is anchored in reality. “The patient is at the beginning and the end of our investment consideration,” she noted.
Recently, it invested in Belgian Cognivia, which uses predictive machine learning-powered algorithms to forecast patient behaviour and treatment responses in clinical trials.
“One of the things that we're very proud of and very encouraged to say is that we were among the very first VCs investing in digital health in a company in Portugal, that was very successful. We've developed an expertise in this domain that we're trying to keep growing, and hopefully discovering technologies and companies in Luxembourg,” she added.
Advice vis-à-vis the greatest hurdle to market entry
Existing payment models could be a major obstacle for digital health companies as they are not always well adapted for digital technologies. Nevertheless, the panellists shared advice to startups seeking funding:
- being passionate about the project
- showing resilience
- not taking “no” for an answer, but being cautious with “yeses”
- building relationships with investors
- knowing when to pivot or stop if the project is not feasible
“Investors seek either a financial return or an economic/policy return, or sometimes both. It’s crucial to understand their motivations during discussions,” advised Carole Brückler, Head of Digital Health Technologies at the Luxembourg Ministry of Economy.
