Half of Digital Health Startups will Fail within Two Years, Accenture Finds

zombie_accentureEven as funding for digital health startups is accelerating, a new report from Accenture (NYSE:ACN) forecasts that one out of every two of these new companies is likely to fail within two years of launch.

Anyways, according to the research, focused on companies with solutions across social, mobile, analytics, cloud and sensors (SMACS), technologies, which improve clinical and administrative functions and support the development and marketing of diverse and innovative offerings, from wearables/nearables and telehealth to remote monitoring and on-demand services, larger companies can mine these “zombie” startups for talent or innovative technologies.

The report, based on an analysis of 900 healthcare IT startups, found that 51% were in danger of failing within 20 months of their launch. Dying startups received nearly $4 billion in funding between 2008 and 2013 and Accenture estimates that $2.5 billion will be invested in health technology startups in the next two years across four key segments:
– engagement (25%),
– treatment (25%),
– diagnosis (21%) and
– infrastructure (29%).

The Accenture research shows that acquiring failing startups, healthcare players can have three major benefits:
– infusion of top talent with “acqui-hiring” – a practice prevalent among many technology companies, such as Apple, Google, Twitter and Yahoo.
– Greater innovation with 1,700 patents between the 900 startups analyzed, so buying zombie startups can initiate and accelerate R&D efforts by capturing intellectual property and patents.
– Bolstering existing solutions with acquisition of digital health startups enabling larger companies to add new products and services and enhance their own solutions.

Go to the report HERE



Join the discussion