mHealth, the next El Dorado for Venture Capital

mHealth, the next El Dorado for Venture Capital

mHealth has come to change the patient-doctor relationship for good – and for the better.

Image | UN Foundation

With the arrival of mobile phones, followed by the smartphone revolution, mobile technology has seen exponential development. It was discovered that these devices could not only be used for voice communication between two people, but also for visual communication between people (video) and to send data and share it between various users and devices.

With regard to this last aspect and at a tremendous speed, multiple functions and features were developed for smartphones and one of the areas where this development is taking place is the health field. The combination of mobile technology and health care is called mHealth (mobile health) and the corresponding market finds itself in explosive growth. From virtual health services over complementary devices to the development of specific applications,

The mHealth Market has a Future and is Popular with Investors

If there is one service the human being can not do without it is health care. It is a basic need not a commodity. This is why investors are making strong commitments in the mHealth market, which is generally divided in two segments: connected medical devices and applications for monitoring and improving personal health. This last segment is dominating the mHealth market with about 80% of its revenues, which is due to the high penetration of smartphones and improved connectivity; but the first segment also shows strong growth rates with devices related to monitor diabetes, a disease which is becoming more common worldwide.

According to a study by Rutberg & Co. from January to August of this year 50 mHealth companies attracted venture capital investments of $310 million dollars. In the same time period last year, the companies only collected $229 million. The total investments in 2012 were $900 million and for 2013 they are expected to exceed $1.000 million.

Among the most important recipients of these investments are the companies Proteus Digital, Fitbit and Withings. The first of which is producing “intelligent pills”, while the second and third make wristbands that measure people’s physical condition.

More figures on mHealth related to the applications market show that North America has the biggest market, with an estimated value of about $2.900 million dollars in 2013. Other important countries for the sector are the United Kingdom, India, China, Japan and Australia. However, the market growth can be observed in all countries, which is also due to an increased health awareness among the population. AppCircus estimates annual growth rates of 20% in this segment for the next five years and predicts more than 14 thousand to be available smartphone applications on the market.

In order to put the potential of mHealth into perspective, let us look at the case of Mexico and Brazil. GSMA and PwC calculate that in these two latin american countries alone, in 2017 up to 40 million additional patients (28.4 million in Brazil and 15.5 in Mexico) could be treated using mHealth services. This would create up to 200 thousand jobs related to the deployment of mHealth services. In addition, it could save the traditional health services $14.100 million dollars in Brazil and $3.800 million in México. These are good news for the health care systems of these two countries and likewise for those all over the world, which are also having financial problems due to the current international economic crisis. A good example of this is the fact that, according to the report mentioned earlier, mHealth could cause savings of up to 99.000 million euro in Europe.

mHealth is here to Stay… and to Expand

Putting the successful fusion between mobile technology and health services to good use is a process that has barely even started. There are countless projects currently in development and you can find out about them on specialized websites on the subject . In order to guide this rapid growth the players involved in the sector have formed alliances. Probably the most important one is the mHealth Alliance, which is promoting the use of mobile technologies to improve health care worldwide. This convener hosted by the United Nations Foundation and funded by the Rockefeller Foundation, GSMA, Norad and the Vodafone Foundation also intends to promote the exchange of tools, knowledge and experience among the parties involved.

mHealth is just one Component of “Connected Life”

Every single day we can read on the internet or in the newspaper how mobile technology is changing the way of life of human beings and their relation with their environment. mHealth is an example for this but is also just one of its component. Traditional education is transformed likewise and we are already talking about mEducation, when hundreds of thousands of children around the world are learning with tablets and laptops full of specialized educational content.

On the other hand, many cities are not passive urban spaces anymore but have become active environments which nurture citizens and governments with simultaneous information. This is called SmartCities. Another greatly influenced field is the auto industry. One example is the positioning of vehicles used for public transportation which can be monitored thanks to GPS. It is even possible to know the number of passengers traveling on a bus in a given moment. This field is called mAutomotive.

To give you an idea of the things to come in the near future it is worth taking a look at a report by GSMA and PwC titled “Connected Life – The impact of the Connected Life over the next five years”. This document might be an interesting read for for the weekend.