UK MedTech and the NHS
In Digital, Planning growth, Raising finance - 3 months ago - 3 min
UK MedTech and the NHS
The UK medical technology or MedTech sector is a rapidly growing one, with nearly 3,700 companies, 98% of which are SMEs, generating £21bn of revenue. The UK is the third largest market for MedTech in Europe. The NHS is the largest consumer for these technologies, however it has high barriers to entry for early-stage businesses due to long sales cycles and structured purchasing processes.
From our experience of working with many MedTech companies we see three key barriers to selling to the market. We have worked with leaders in the MedTech space to address how start-ups can overcome these barriers and enter the health services market.
Breaking down barriers
Identifying your target within the NHS organisation
A successful prognosis largely depends on whether innovative ideas can make it through the door of the NHS. If you ask start-up founders, including even the most entrepreneurial clinicians that have come from within the system, tackling the sheer scale and complexity of the organisation can be a challenging hurdle.
Risk and data security
Risk is a major hurdle. Budget constraints and increased demand are putting frontline services under strain, which means that any interest in taking a leap of faith in a new system or technology is limited. Protecting patient data is paramount.
Collaboration is key
Focusing on customer service
Tony Young, National Clinical Lead for Innovation at NHS England, is in charge of innovation across the entire organisation and says there has been a change in culture, thanks to a range of new initiatives and greater collaboration with industry.
He says the door is open: ‘We are working with industry in partnership to develop products and services to address pain points. We know that if you work with clinicians on the problems they face and collaborate with them, you are much more likely to find an innovative idea being taken up and adopted.’
Young hopes that the launch of a series of programmes and initiatives intended to foster entrepreneurialism and improved access for start-ups will help. Some 15 programmes now exist to support innovation. One of the most successful, the NHS England Clinical Entrepreneur Programme (CEP), is the world’s largest-ever clinical training entrepreneurship programme.
Connecting the dots
The healthcare revolution
This is possible, in part, because of what Young calls the ‘personalised, democratised healthcare revolution. More and more innovations are coming together to empower patients and put more tech directly into their homes. It’s moving closer to the consumer,’ he says.
But will the shift in consumer behaviour come fast enough to relieve such great burdens? What’s increasingly clear is that industry and the healthcare system need to collaborate – and that policymakers have a role in opening up routes into the NHS and supporting the growth of health-tech start-ups.
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Fundraising in MedTech
The rise in the popularity of the sector has been evident in the funding market. According to Beauhurst data, there has been 459 early-stage fundraises by Medical Technology businesses in the UK over the past three years. Of these fundraises our analysis has focused on the 368 where data is available to provide the following benchmarks:
- Source of funding: Venture Capital and Government are the leading investors
- Size of team: Companies raise with small teams
- Quantum of funding: The average cheque size of MedTech companies was £1.05m
- Valuation: At this stage, valuations tend to be under £6m.
To see how these and other sector benchmarks might guide your own plans, contact the team on G.Enquiries@uk.gt.com.
This is an edited version of an article which first appeared on Strategies for growth.