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On digital health accelerator and corporate start-up programs

Most digital health accelerator and corporate start-up programs must refocus to survive

By Markus Pohl

Berlin, March 29, 2017

The hype around programs that connect start-ups with corporates and investors in digital health has peaked.

For two years running, the number of new accelerator programs has decreased. A lot of accelerator programs are having problems in attracting enough high quality start-ups to justifying budgets from their partner or parent companies. Many digital health accelerator programs will have to change along four dimensions to survive.  

Update 2017

At the beginning of 2017 there were over 340 early stage investors; i.e. accelerators and incubators investing in healthcare start-ups. The growth rate of new accelerators and incubators entering the market has slowed substantially over the last two years. Nearly all of these programs target digital business models.

There are over 15,000 start-ups based on a mobile app business model. This means that there are less than 50 mobile health app start-ups per accelerator! There are just not enough start-ups out there to cater for the demand of 340+ accelerators and incubators. Especially for the rather small and unknown accelerators, which are overshadowed by the regionally well-known programs such as Plug and Play, StartUp Health and Rockstart.   The number of targeted digital health start-ups per accelerator is insufficient for most accelerators to build up a high-quality selection funnel.

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While it is true, that most start-ups will apply for multiple accelerator programs, usually accelerators need to go through several hundred of applications before they can find a candidate that fits to their program.

Assessment

After talking to many digital health accelerators in preparation for this year’s mHealth App Developer Economics Survey (now live: click here), one common problem that stood out was that accelerators struggle to build up a high-quality selection funnel. With the majority of accelerators somewhat struggling for good quality applicants, how is it going to be possible for these programs to survive?

Conclusion

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