Medtech’s £300m exit shows ‘massive potential’ of Scottish life sciences sector
The recent international success of an Edinburgh-based remote health monitoring platform has shown the “massive potential” of Scotland’s life sciences and health sectors, according to a leading specialist in venture capital.
Scottish investment manager Par Equity secured its latest exit when US consumer electronics giant Best Buy acquired Current Health in October.
The medtech startup was purchased for $400 million (£300m) – making it the second-largest digital health exit in Europe to date.
Scotland boasts one of the largest life sciences clusters in Europe. The sector’s combined revenue was estimated at £6.6 billion in 2018, and is forecast to grow to around £8bn by 2025.
Par Equity led Current Health’s first external investment round in 2016 and investing in every subsequent round of funding – ultimately securing an 80 per cent internal rate of return (IRR) for the firm’s syndicate of investors.
It also participated in the company’s last financing round, in April, ahead of the acquisition, when a collective of the world’s largest pharmaceutical and healthcare venture capitalists led by Northpond Ventures secured a $43m (£32.5m) Series B round into Current Health. At the time of the acquisition, Par Equity was the second largest shareholder in the startup.
Robert Higginson, co-founder of Par Equity, said: “Across our universities, ambitious young entrepreneurs are driving advances in technology, covering fields such as artificial intelligence, quantum computing, robotics, photonics and nanotechnologies.
“Within healthcare, institutional investors have a great opportunity to step up and play a key role in supporting the NHS to address some of the major challenges faced by society such as aging demographics and Mental Health”
Current Health’s rapid success resulted from its role in monitoring critical patients at home for healthcare providers like hospitals in the US, in parallel with working with the medical research community to support the development of Covid-19 vaccines.
In 2020, it was one of the fastest growing healthcare companies in the world, increasing revenue by more than 3,000 per cent.
Current Health’s technology, which sits at the nexus of healthcare delivery and drug delivery, is open architecture. This means that more than 200 other healthtech devices feed further data into the system, creating an increasingly powerful device for clinicians to improve patient outcomes.
Higginson added: “The healthcare and life sciences sectors are expected to grow rapidly over the next few years and there are several agents of change helping to unlock this potential. Innovate UK, the Association of British Healthtech Industries (ABHI) and our world class universities are highly impactful.
“Closer to home for Par Equity, there’s support at the top from the Scottish Government, Scottish National Investment Bank and Scottish Enterprise through to specialist centres of excellence such as the Roslin Institute, Edinburgh BioQuarter, BioCity and the Industrial Biotechnology Innovation Centre in Glasgow.
Higginson also highlighted the importance of the work into the sector led by Life Sciences Scotland (LSS), the industry leadership group chaired by trade minister Ivan McKee.
Par Equity expects to deploy more than £26m this year, representing a record year of deployment activity.
It plans to focus approximately 20 per cent of its funds on digital health technologies, while building its capabilities to support larger scale-ups following the findings in Mark Logan’s 2020 Scottish Technology Ecosystem Review, which highlighted a gap in funding for companies seeking £3m to £10m of funding.
Speaking at the time of the acquisition, Current Health co-founder Chris McCann said: “Over the coming decade, significantly more healthcare can be delivered in the home. We started Current Health to make that exciting transition radically easier for healthcare providers to achieve.
“Best Buy has unparalleled physical reach, world-class supply chain logistics, and trusted support services–allowing us to provide a high-touch consumer experience, at scale. We’re excited to join with Best Buy Health to move safe and effective healthcare into the home globally.”
Deborah Di Sanzo, president of Best Buy Health, said: “The future of consumer technology is directly connected to the future of healthcare. We have the distinct expertise in helping customers make technology work for them directly in their homes and by combining Current Health’s remote care management platform with our existing health products and services, we can create a holistic care ecosystem that shows up for someone across all of their healthcare needs.”
Why 2022 will be a significant year for digital learning
In 2022 the impact of technology in the classroom shows no sign of abating. The ‘pandemic years’ have proved critical in providing impetus for weaving and integrating powerful digital tools…
On the cyber horizon: predictions for 2022
As 2021 draws to a close, we see a world still challenged by Covid-19, necessitating new business models, new channels and a shift (perhaps for the long term) to remote…
Jude McCorry: “Focus on cyber strategy alone is not enough”
The number of cyber attacks has been on the rise since the start of the pandemic, with both international and domestic cyber criminals taking advantage of our increased reliance on…
Not a drop wasted: digital cask filling can save the whisky industry millions
Scotland’s food and drink sector is central to the country’s economy. Bringing in around £14 billion every year, it employs more than 115,000 people and accounts for one in five manufacturing…
The value of engineering in the curriculum
If you were to look back at the greatest discoveries in science and technology over the past 30 years, you would soon notice that engineering is a key catalyst for…
Glasgow Council leads the way in digital learning
In 2017, we at Glasgow City Council took the opportunity to overhaul our digital approach to education and redefine learning, keeping in mind the core aim of reducing the impact…
Why data is the new oil
In 2006, British mathematician Clive Humby coined the phrase, “Data is the new oil”. This analogy has been proven correct as data now powers entire industries and holds tremendous value…
Global Entrepreneurship Week offers chance to reset aspirations amid new innovation landscape
With the advent of Global Entrepreneurship Week, it is an opportunity for us to celebrate the innovators, the grassroots risk takers who drive the economy, and those who invest in…