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Healthcare is hands down the most exciting sector to invest in right now

13 May 2019

Today’s start-ups are transforming the way people think about their health – but the revolution is just beginning. We asked Will Gibbs, Investment Manager at Octopus Ventures, to tell us why the healthcare sector is in such rude health, and where some of the best investment opportunities lie.

Everyone on the planet needs healthcare, and rapidly evolving technology promises to change how we manage our health in all sorts of ways. That creates a huge range of investment opportunities – not to mention the chance to change billions of lives.

“This is the sector.” That’s how Will Gibbs, who leads the ‘Future of Healthcare’ investment team for Octopus Ventures, puts it. As he explains: “I’m looking at the businesses that are out there and asking, ‘Which of these will make my life and my family’s life better?’ Because if I can answer that question, I can probably spot the next billion-dollar health startup.”

Innovation all over

When we think of healthcare innovation, we tend to think of ‘glamorous’ topics – like curing cancer and wiping out infectious diseases. But Will thinks many of the most interesting areas are those with a much lower profile.

“Take menopause,” he says. “As a society, we don’t talk much about it – and even within healthcare, it’s often overlooked. Hormone Replacement Therapy (HRT) is the dominant treatment, but there are all kinds of problems with it. That means there’s potential for new solutions to fundamentally change things, and make life better for half the people on the planet.”

Will points to falling sperm counts as another example. “Sperm counts are dropping rapidly in the West, and there’s not a lot of research into why. This is a potential reproductive crisis, and a business that can help address it is going places,” he says. “Erectile dysfunction startups like Hims have shown that it’s possible to address personal – once taboo – topics like this and get consumers interested. The appetite is clearly there.”

The power of personal

A key trend Will points to is ‘personal health’ – the idea that our health is something we’re personally responsible for.“Just look at the Apple Watch,” Will says. “It was originally sold as a convenience device, but now the focus is on health. It has an ECG app. It measures your sleep patterns.”

“More and more, people see their health as something to actively manage – not something they only think about when it goes wrong. People are asking themselves: should I be eating less meat? How often should I go to the gym? If I do this now, what will my health be like when I’m older?”

Will points to the blood testing kit startup Thriva as another great example. “Twenty years ago, who would have voluntarily tested their own blood? That was a doctor’s job. But not anymore.”

The big picture

Will is excited about the future of health – both from a human perspective, and a financial one. “Healthcare will be the world’s biggest industry in a decade or two. It’s just a matter of time,” he says.

The market is certainly changing fast. Elder, the at-home care provider, is poised to become the number two player in the UK market this year. It was founded just three years ago.

“If you get this right, it’s pretty exciting how quickly these businesses can scale. And it’s even more exciting when you think about the impact they’ll have.”

“We’re building the future of healthcare. That’s something that will shape all our lives over the next few decades.

“What could be more exciting than that?”

Find out more about some of the companies that Octopus Ventures invests in by visiting their website