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How to raise wise money in health? – Slush keynote highlights

 

How to raise wise money in health? – Slush keynote highlights

Reaktor Ventures (RV) is one of the most active early stage investors in Nordics. They have 7 health and wellbeing investments in their portfolio. Netmedi is a pioneer in human-centric digital health solutions in Europe and one of RV’s first investments. Netmedi is known for Kaiku Health application supporting cancer patients.
© Tuomas Sauliala / Reaktor

© Tuomas Sauliala / Reaktor

We had the honor of sharing Reaktor Ventures’ and Netmedi’s experiences on stage at the Upgraded Health Networking which was organized already for the second time in Slush by HealthSPA. Here is the recap to the points discussed.

Point 1: Match the time spans

Slush was hot with health. Nordics are becoming the hotspot of healthcare innovation. We have a strong healthcare system compared to many other countries but we still struggle with aging population. We have world-class medical and engineering capabilities thanks to well educated work force. And we have a blooming startup ecosystem second to Silicon Valley or Tel Aviv thanks to student-driven initiatives like Slush, Aaltoes together with communities like HealthSPA.

As Paul Graham succinctly put it, great startup ideas come from “Live in the future, then build what’s missing.” Much of the ease, speed and flexibility we take for granted in most of our daily lives is entirely absent in healthcare IT. What we in the tech startup community think of today, is often SciFi future to doctors and nurses. They work through kafkaesque bureaucracy and medieval UI’s. Medicine is a bigger field of science than all the rest combined and quite likely the biggest business in the world. It’s a vast open field for software startups.

However, healthcare as a field of innovation is very different. We can not fail fast like Eric Ries suggests because we deal with human lives. A patient application can not be just randomly tested. Instead, randomized controlled trials are needed. The time span of R&D and hospital purchasing processes is very different compared to delivering a gaming app in iStore or compared to a venture capital fund cycle. When raising money, startups should very carefully think through the realistic time span of the business and carefully match it with the time span of the investor.

The trigger why Netmedi and Reaktor Ventures started to collaborate in 2013 was the vision of forever changing world: Change is forever. Reaktor is forever. Netmedi is forever.

Point 2: Concentrate on results

The hype around funding is very characteristic to the world of startups. Funding shows that investors believe in potential. Startups should also remember that funding rounds bring no customers. Funding just enables the team to start working – and work really, really hard.

Instead of hype, we should concentrate on bare results. This is especially important in healthcare where all new applications need to be evidence-based.

From an investor point of view, it is important to see which startups are just talking the talk and which are walking the walk. This comes down to the team. Buzzwords like big data, artificial intelligence and machine learning are now shouted by every second startup. Few teams actually have the understanding and capabilities to deliver their talk. Those teams who deliver results will also find the wise money. And to tell who really understands big data, see how many real data scientists they have in their team..

Point 3: Stay hungry, stay healthy

Industry understanding (point 1) and team results (point 2) are crucial in raising wise money. It requires patience from both entrepreneurs and investors to find the right match. In order to fully understand the healthcare requirements and time spans of different stakeholders, to build the team and to show results, patience and determination can not be emphasized too much.

To conclude, our final advice to all healthcare transformers is: Stay hungry, stay healthy!

Lauri Sippola, CEO & Founder, Netmedi
Oskari Kettunen, Managing Partner, Reaktor Ventures

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