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The well-known consumer electronics show, which was virtual this year, features company showcases, keynote speakers from top global consumer companies, and a plethora of webinars on topics including the latest products to make your home smarter and what’s happening in the fintech, e-commerce and digital health industries.

, lead of the digital and technology group at , led a panel of venture capitalists speaking at the pre-taped “Digital Health: Business Growth and Opportunities” session that included:

• , CEO at ;
• , founder and managing partner at ; and
• , principal at .

, global head of digital health at , kicked off the session with a look at the digital health landscape. He reported that investment in the space reached $14 billion-plus in 2020, with record-breaking capital being invested in some key areas of telehealth, mental/behavior and fitness/wellness.

With physicians more comfortable in using telehealth, M&A and IPO activity expected to continue, and venture capital not letting up, Fishburn said that “digital health is finally mainstream.”

On new trends

��’K���ڱ�: “The consumerization of health and the need for a better experience. Post-COVID has emphasized that in simplifying the experience and making it consumer-first.”

Thomas: “Yes, consumerization right now is an interesting space. The risk of going into the hospital is high today, and people are afraid. As a result, I see a lot of direct-to-consumer and at-home products. Another piece is the affordability of health care, and I am starting to see a model of breaking down components so that individual products are affordable.”

Evans: “We put an emphasis on the ‘plumbing’ of health care, the B2B models that have a huge potential to introduce efficiency and effectiveness, and not at the expense of experience.”

COVID as a sustainable business opportunity

Thomas: “COVID created some really long-lasting changes in everything. I actually don’t mind. A number of companies I did last year were being supported by the tailwinds of COVID. I am going to continue to invest in those companies. I’m not going back to the office at least for another nine months and even then, I want everyone to have the yellow dot that shows you got the vaccine. There are a lot of folks who have survived this moment and have life-changing impact.”

On investment surprises

Evans: “What surprised me was the pace at which the capital markets and rallying of public markets returned to normal at the beginning of the pandemic. Also, the pace at which investors came back, and the degree to which the venture industry and entrepreneurs knew how to deal with a crisis.”

Thomas: “I was also surprised by how much more VCs were interested in health care. People were reaching out to people they had not before. I’ve been able to get more access to different people, and that the decision to invest in health care is more important.”

��’K���ڱ�: “It’s not like everything got hard in COVID. Those problems that were siloed in nature existed before. Entrepreneurs have come in and are thinking outside the health care system, breaking down the walls and creating better customer experiences.”

Similarly to the prediction about the consumerization of health care, sources I spoke to earlier in the month shared the same forecast as startups help us rethink health care.

Crunchbase data also showed that investors poured record amounts of investment into digital health startups in 2020: $14.2 billion globally and $9.2 billion domestically.

Meanwhile, the global pandemic increased the public’s awareness and understanding of how interconnected the world is, a view that will mature in 2021,, a general partner at, which invests in health care companies, told me.

For another CES highlight, catch my synopsis of the Jan. 12 session called “The Rise of FinTechs – Has Consumer Financial Behavior Changed Forever?” which included conversations with, head of financial access at, and, head of payments partnership at.

Feature screenshot was taken during the session
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Vienna-based is at it again, this time with a second fund dedicated to digital health startups.

The firm is raising $50 million for the fund, which will back seed-stage deep-tech companies with defendable intellectual property. The fund is led by , partner with APEX, and a radiologist who previously worked at AKH, Vienna’s General Hospital, as well as at McKinsey in London.

Most of APEX Ventures’ investments have been made in the Germany, Austria and Switzerland region, but with APEX Digital Health, the firm is expanding its focus area to include the rest of Europe, Israel and the U.S.

Since the beginning of the year, the firm has made investments in four digital health companies:

• , which optimizes workflows in pathological analysis;
• , a company developing an artificial intelligence-powered MRI imaging machine;
• , a biotech company focused on medical image processing; and
• , a digital biotech company developing AI-based speech analysis.

Euller discussed the new fund’s strategy with Crunchbase News:

Why is now a good time for your second fund?

Part of it is the natural life cycle of a fund. We are almost four years into our first fund, so we wanted to start looking at a second one right now.

What do you see going on in digital health that makes it an appealing industry for your fund?

The market is growing rapidly in that space. There are still a limited number of institutional players with a dedicated focus on digital health in Europe. In the U.S., it is a little further along, but still not common. Digital health is going to be an ecosystem on its own, especially as COVID-19 has proven how important health care and digital health is, and how to overcome the situation to certain degrees. This is about putting more capacity in our health care system.

There is also a shift moving toward digital biomarkers, which are being used for speech, imaging and pathology. You can create a biomarker for speech that could detect Alzheimer’s disease, or a scan that would identify certain pixels and structure them together to show cancer.

There are so many layers to digital health. What is your strategy in finding promising startups?

We can put companies into certain buckets: artificial intelligence, machine learning, pathology, radiology, early-stage, but it is always about the team. We are investing in a group of people with protectable technology.

We are getting to know them, their personalities, background, mission and aspirations, as well as checking their technology. We want to look at where their data is coming from, how unique it is, the annotations, and the continuous training program.

This new fund will also seek out U.S. startups. Are there any startups here that you have already identified?

We haven’t yet identified U.S. companies, but we are looking further into them; called first and second screening. We would not be lead investors in the U.S., we would be a participant. In Europe, we would take the lead, but in the U.S. and Israel, we would be co-investors.

From going on the road for your first fund, what lessons did you learn?

One of the things we have learned is to have a more simple investment “waterfall” (the method of splitting profits among partners that allows for profits to follow an uneven distribution) for limited partners.

Another is that with your first fund, you usually have nothing more than a PowerPoint deck. With the second fund, we have a track record with 15 investments and one exit, so we can show that the case is working. It’s something that has made life easier.

A third lesson is to prepare your fund for institutional investors so that it is set up for those types of pension funds. You need a very clear message and focus on something people can identify with.

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