Half of health IT startups doomed to fail
An analysis of 900 health IT startups found that about half will fail less than two years after launch.
According to Accenture's report, about half of the startups analyzed were in danger of failing within 20 months of launching, allowing larger companies to "mine" them for technology and talent. These startups "on the brink of failure" raised almost $4 billion in funding between 2008 and 2013.
The report projected that digital health startups will raise an additional $2.5 billion in the next two years with almost 30 percent to be invested in infrastructure; 25 percent in engagement; 25 percent in treatment; and 21 percent invested in diagnosis.
"Rather than discard the investment that has been made in getting sputtering startups off the ground, it often makes sense for healthcare stakeholders to acquire them," said Kaveh Safavi, managing director of Accenture's global health care business. That allows larger companies to "salvage" the startups' best people and technologies. "Many digital startups that are dying or in danger of failure have developed solutions that can help traditional and non-traditional health care companies achieve their goals."
Editor
Editor Beth earned a bachelor’s degree in journalism and master’s in health communication. She has worked in hospital, academic and publishing settings over the past 20 years. Beth joined TriMed in 2005, as editor of CMIO and Clinical Innovation + Technology. When not covering all things related to health IT, she spends time with her husband and three children.