Why it’s harder for health accelerators

Why it’s harder for health accelerators 150 150 Biomedical & Health Informatics (BHI)

Health-specific incubators and accelerators have been expanding and proliferating for the past two years, and they seem to be making an impact — Rock Health, for instance, recently announced that their average startup is valued at $5.2 million. But do these relatively new, health-focused accelerators have staying power? That’s the question a new report from the California Healthcare Foundation seeks to answer.

In “Greenhouse Effect: How Accelerators Are Seeding Digital Health Innovation”, author Aaron Apodaca talked to various experts about the unique challenges for health accelerators. For one thing, traditional technology accelerators rely to some extent on the occasional blockbuster startup exiting through a major IPO. There are very few examples of that happening in health IT, so incubators need to be more selective, the report suggests, and bank on a majority of the supported companies doing well.

Another consideration, Apodaca writes, is that many — though not all — of the startups running through incubators now are direct to consumer health services of some kind, whether apps, devices or online services. But experts interviewed in the report, like HealthTech Capital founder Anne DeGheest, said many investors still consider that to be an unproven, untested market vector.

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