Israeli Digital Health 2020

Opportunities amidst the pandemic

Avg. Reading Time: 10 min

Israeli Digital Health 2020

Opportunities amidst the pandemic

Avg. Reading Time: 10 min

**THE DIGITAL HEALTH* SECTOR AT A GLANCE**

~180

Investors with an Israeli presence

~40

MNCs with exposure to Digital Health

17

Technology Transfer Offices

>50

Hubs, including 19 accelerators

4

HMOs with >25 years of digitized EMRs

675 Digital Health Companies

Distribution by stage

Breakdown of companies by subsector

Diagnostics

Decision Support

Remote Monitoring

Clinical Workflow

Assistive Devices

Digital Therapeutics

Patient Engagement

Number of active companies

For subsector definitions click here

Clinical Workflow: Solutions that improve the current healthcare workflow by using electronic medical records (EMRs), healthcare-related payment platforms, on-the-job training software, RF tracking of medical equipment, and cybersecurity for medical networks and devices.

Decision Support: Data analysis software that enables more accurate, personalized and data-driven decisions to improve diagnostics and treatment outcomes. These solutions utilize AI algorithms and are primarily designed for physicians.

Digital Therapeutics: Digital tools and platforms that allow consumers to proactively track, treat and manage their own medical conditions. Biological, environmental and behavioral data of the consumer is collected and analyzed, then translated into actionable insights and recommendations for health improvement.

Remote Monitoring: Technological tools that continually monitor and collect patient data remotely, helping both to prevent medical events and to provide alerts of their occurrence.

Assistive Devices: Devices designed to aid and assist consumers with permanent physical disabilities, such as vision, hearing, and age-related conditions.

Diagnostics: Data analytics tools that provide automatic, fast and affordable medical diagnostics, which are especially valuable for early disease detection. Many of these tools draw on big data, artificial intelligence and computer vision to provide accurate diagnoses.

Patient Engagement: Technologies that increase patient cooperation and compliance with healthcare guidelines and medication regimens, including population health management.

Stages definitions

Bootstrapped
A company that is self-financed (e.g. personal savings) rather than operating based on external funding. A bootstrapped company may have received grants or revenue from initial sales but not enough to sustainably finance its continuous operations.

Early Stage
Any company that has raised a pre-seed, seed or A round

Later Stage
Any company that has raised a B round or later

Public
Indicates that the company has held a public offering and is traded on a stock market.

Revenue Financed and Established
A company that is not backed by venture capital and is financing its development and continued operations through the revenue it is generating. The company has existed in the industry for more than five years.

Major sector developments in 2020

55 new Digital Health startups launched in 2020, in line with the pace of the number of new companies founded each year since 2016. The new companies founded in 2020 were mostly in the Diagnostics, Decision Support and Clinical Workflow subsectors, and include eight COVID-19-focused startups.
Startups pivoted and developed numerous additional solutions, sometimes these new solutions were co-developed togehter with large organizations. Twenty-two existing companies expanded into the Health vertical during 2020, including nine into Digital Health.
Many new partnerships were established between local and global ecosystem players, including healthcare providers, pharmaceutical companies and investors.

Examples of pivots:

SURE Universal provides a secure, personalized, end-to-end IoT home healthcare solution for remote diagnosis, monitoring and telehealth. The company’s platform delivers a complete, standard-compliant IoT software solution that provides system integrators with maximum interoperability and data security. The solution addresses home healthcare, home safety, security, smart homes and entertainment considerations.

Diagnostic Robotics temporary pivoted from a B2B to a B2G model to work directly with governments, helping to predict future COVID-19 outbreaks. The company worked with healthcare providers in Israel and abroad, sending out simple questionaries to the population, and used its AI algorithms to create COVID-19 heat maps for areas ranging from a specific neighborhood to entire cities. Now the company has returned to its core solution: clinical triage and prediction.

Vocalis Health is focused on developing voice analysis-based solutions for the detection of various health conditions. The company has developed a solution for 30-second COVID-19 detection which can be used alongside traditional biological tests. Vocalis Health has conducted pilots in a number of hospitals in the U.S., Israel and India.

Sanolla specializes in infrasound-enabling technology for the detection and monitoring of cardiopulmonary conditions, primarily for chronic patients. The company has developed an additional solution for the early detection of COVID-19.

New companies founded:

LessTests is a new company launched to focus on COVID-19 tests, offering single-step sample pooling for labs. The company has already received Israel Ministry of Health clearance and started partnerships in Israel and India.

Virusight Diagnostics is the result of a collaboration between NewSight Imaging, which develops sensors for machine vision, and Sheba Hospital. The company is the developer of a COVID-19 screening device that can diagnose COVID-19 in less than one second with 95% accuracy.

Zeppi is a floating robotic home communication device designed to help connect the elderly population with their families and caregivers.

Stability in total funding: fewer, yet larger rounds

Funding by round type, $m

Early stage

Late stage

Other

Number of rounds

Early stage

Late stage

Other

Subsector analysis

Funding has varied considerably between different subsectors. The leading three subsectors were Decision Support, Remote Monitoring, and Diagnostics.

Diagnostics

Decision Support

Remote Monitoring

Clinical Workflow

Assistive Devices

Digital Therapeutics

Patient Engagement

Big leap in investments

Diagnostics companies raised $340M, or 44% of the total sector funding in 2020. This subsector stood out as investors were increasingly seeking affordable diagnostics solutions. Despite a high concentration of funding, the solutions were diverse and not limited to COVID-19-related applications.

Digital mini x-ray company Nano-X Vision received $105M in numerous rounds and eventually went public on the NASDAQ in August, raising $190M.

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AI telemedicine and symptom checker company K Health raised $90M in two rounds in 2020, followed by $132M in January 2021, bringing the company’s valuation to $1.4B. The company’s solution will be integrated into the Mayo Clinic’s Clinic Data Analytics Platform. K Health has more than 4 million members and is growing at a rate of 10,000-15,000 new users a day.

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Point-of-care blood test company Sight Diagnostics raised $71M in a D round from LongLiv Ventures, OurCrowd and Koch Disruptive Technologies. Among Sight’s achievements during 2020 are several research projects focused on COVID-19, including a joint project with Shaarei Tzedek hospital, as well as expansion into Middle East markets such as the UAE and Saudi Arabia.

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Funding, $m and as % of sector total

Diagnostics

% of total funding

A few big rounds

Most of the solutions in this subsector are closely linked to Diagnostics, as they help doctors decide on a diagnosis or provide a second opinion. The number of Decision Support companies continued to increase in 2020, with 11 new companies founded. While this is less than previous years, Decision Support was still the fastest growing subsector after Diagnostics.

Smart radiology company AIDoc raised $20M in a B round from Maor Investments and Alpha Intelligence Capital. During 2020 the company received FDA clearance for an AI solution triaging incidental pulmonary embolism.

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CLEW Medical raised $10M in a B round from an investors’ consortium which included Pitango. The company has been very active around COVID-19, predicting patients’ deterioration and COVID-19 complications in ICUs.

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Augmedics, the company that developed an AR guidance system for surgical procedures, raised $15M in a B round led by the company’s management, with the participation of TerraLab Ventures and other investors. The company’s Spine System was used for the first time in Johns Hopkins University.

Explore more in Finder

Funding, $m and as % of sector total

Decision Support

% of total funding

The effect of COVID-19 on the Israeli Digital Health sector

The need for new solutions led to increased interest in Israel’s Digital Health sector. The most sought-after solutions were those designed to help with the limitations and challenges of lockdown and social distancing, rather than solutions related directly to COVID-19 itself.

As was the case globally, the sector experienced strong interest in solutions related to remote care, including those required for diagnostics and telemedicine, such as point-of-care (POC) blood tests, home diagnostics and home care in general.

Examples of health startups:

Soapy – Originally focused on rural schools in areas with a limited clean water supply, Soapy’s smart handwashing stations became an essential solution for many industries during the pandemic. The company’s solution is deployed in 12 countries, in industries ranging from healthcare to food.

Salignostics – Specializing in rapid, saliva-based home diagnostic test kits, Salignostics began with pregnancy and malaria tests and then added COVID-19 diagnostic tests to its development pipeline.

EyeControl – An assistive technology company initially focused on locked-in patients, EyeControl added a solution to help ventilated patients communicate with hospital personnel.

Examples of non-health startups:

AnyVision – This visual intelligence solutions company has developed thermal cameras to remotely measure body temperature and determine whether readings out of normal range are due to illness or physical activity. These cameras have been installed in Ichilov hospital in Tel Aviv.

VocalZoom – An Industry 4.0 company offering multisensory screening solutions as well as voice commands and other vocal communication solutions aimed at reducing the spread of germs.

Companies with solutions related to COVID-19 attracted record-level funding

We identified startups that developed solutions relevant to COVID-19 and its associated effects and grouped them under the label of "CoronaTech".

The median round size of a CoronaTech companies in 2020 was $8M, almost double the median investment in the same companies in 2019, and $5M more compared to non-CoronaTech companies.

Corona and Non-Corona DH companies funding and median rounds, $M

Median rounds

Companies funding

Corona

Non-Corona

Corona

Non-Corona

Read more about how we defined Corona-related companies

This sector includes companies offering a wide variety of direct and indirect solutions for coping with the COVID-19 situation, including vaccine development, drugs and tests; remote monitoring for patients and the general population; tracking and tracing technologies; and solutions dealing with the social and mental aspects of social distancing.

93% of all CoronaTech companies were founded before 2020, meaning that either their existing solutions turned out to be exceptionally relevant to the situation or they pivoted into CoronaTech or added CoronaTech solutions in 2020.

There are currently 293 companies with CoronaTech solutions, including 196 health-related and 137 from the Digital Health sector. Companies from the Digital Health sector are dominated by Decision Support, Diagnostics and Remote Monitoring, which represent 70% of the total.

51% of the companies that reported flourishing due to the situation had a released product, as opposed to the 39% that said they were negatively affected.

61% of startups in the sector that flourished due to the situation either developed an additional solution or pivoted in response to the situation.

61% of the companies that flourished either already have regulatory approval or don’t need it.

Some startups reported that despite having had a negative effect on their current operations, the pandemic has improved healthcare providers’ awareness and attitudes regarding Digital Health tools in general, thereby increasing their potential opportunities.

COVID-19 accelerated the trend of decentralized solutions

A unifying feature of the companies that saw the greatest success in 2020 is that they all help to decentralize healthcare by making it available outside of hospitals and large clinics and by improving its quality and affordability. These solutions have the ability to be transformative, changing the way that healthcare is provided or offering totally new services that were not available previously. The COVID-19 pandemic has turned some previously nice-to-have solutions into must-have ones.

The leading solutions share a number of common features:

Cutting-edge technology – Leading solutions almost all utilize artificial intelligence, while many others use computer vision and AR/VR.
Agility – These solutions can quickly be adapted to new uses due to a strong focus on technological expertise.
Use cases during the pandemic – The transformative nature of these solutions makes them highly suited to the challenges of the pandemic, which has required healthcare to be provided in new ways.

AI was the main technological engine behind this trend

The leading solutions are heavily focused on technology, and on AI in particular. It has become so dominant that 95% of all funding in the leading subsectors in 2020 was in companies utilizing AI as a core technology.

For the sector as a whole, the share of funding raised by AI companies has grown every year. Many new Digital Health solutions are developed using AI from the beginning, while more mature companies are adding AI components as a next layer to their solutions.

AI funding

% of total funding

ABOUT START-UP NATION CENTRAL

Start-Up Nation Central is an independent nonprofit organization that builds bridges to Israeli innovation. We connect business, government and NGO leaders from around the world to Israeli innovation through highly customized business engagements and through Start-Up Nation Finder – an easy-to-use, up-to-date, free online platform for discovering and connecting with thousands of relevant innovators.

We identify technological sectors with high growth potential and help them develop to maturity. We are currently focused on the Digital Health, AgriFood-tech and Industry 4.0 sectors, exposing them to global audiences, helping them develop practical tools, attracting investors and establishing and nurturing tech communities to increase collaboration, knowledge-sharing and skill expansion.

We accumulate knowledge and generate in-depth insights about Israel’s innovation sector and share these findings with our clients and partners.

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METHODOLOGY

Dataset amounts and definitions relating to Israeli innovation and entities are in accordance with those of Start-Up Nation Finder. Companies considered for this report were founded by Israelis and pursue R&D activities in Israel and are not service providers. This report organizes Israel’s Digital Health sector into seven subsectors. This division organizes the relevant companies into an inherently simplified classification. Some companies offer multifaceted technologies and therefore may be assigned to multiple subsectors. However, for the sake of identifying investment and technology trends, we associate each company with only one subsector that reﬂects the company’s primary focus. Figures representing the number of companies and investments in Israeli Digital Health and its subsectors are likewise exclusive.

Authorship and Editing

Lena Rogovin – Senior Digital Health Analyst, Sector Lead

Aviv Alper – Senior Director of Research

Meir Valman – Director of Research

Copyright © 2021 Start-Up Nation Central Ltd. (CC). All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, without permission in writing from Start-Up Nation Central Ltd. (CC). Requests for permission to make copies of any part of this publication should be addressed to: finder@sncentral.org

Avg. Reading Time: 10 min

Avg. Reading Time: 10 min

**THE DIGITAL HEALTH* SECTOR AT A GLANCE**

~180

~40

17

>50

4

675 Digital Health Companies