1 Nov, 2015

Israeli Digital Health: Investors PerspectiveLevi Shapiro, Founder, mHealth Israel

mHealth Israel: Join Our Community

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Open source database of 250+ funded mHealth co’s

Pavilion: HIMSS and ATABi-annual conferences:June (Jerusalem); Feb (Tel Aviv)

Monthly Meetups

Agenda

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Triggers for Digital Health Investment

Israel- Venture Capital Background

Israel Health Sector

Israel Digital Health Investment

Theme I: Regulatory Trigger (Obamacare)

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Theme II: Consumerization of Healthcare (Walgreens, CityMD, etc.)

5 Source: RockHealth

Theme III: Personalized Medicine + Portability & Sharing of Health Information

6 Source: RockHealth

Thesis: 3rd Wave of Digital Health Investment

Wave IRemote Telemedicine

Wave IIEnterprise Software

Wave IIIConsumerization of Big Data

TriggerObamacare, 2009

Example: SHL; Nataliacquired by Jinpeng-Sanpower 2014, ~$100M

dbMotion -acquired by Allscripts 2013, $235MAeroScout -acquired by SBD 2012, $240MiMDSoft -acquired by TPG 2012, $80M

250+ Israeli digital healt startups Sensors, applications, big-data, machine-learning, AI, etc

Thesis: Big Data, Personalized Medicine- In Your Pocket

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Investment Thesis: Migration of Spending to Preventitive Solutions

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Investment Thesis: Aging Population

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Investment Thesis: Optimal Period for Wearables Investment Has PASSED

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Late for Wearable Investments

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Agenda

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Triggers for Digital Health Investment

Israel- Venture Capital Background

Israel Health Sector

Israel Digital Health Investment

Haifa

Herzliya

Tel Aviv

Jerusalem

Factors Enabling Israel’s Unique Healthcare Ecosystem

Rehovot

Yokneam

Beer Sheva

Petach Tiqva

• Seven university-associated and five hospital-linked technology transfer organizations (TTO) provide a valuable bridge to connect researchers and early-stage projects with both investors and partnerships with multinational corporations.

• The technological incubator network houses up to 15 companies each and provides them with a full suite of services and business development, as well as funding of approximately $500,000 for the first 2-3 years of their lives.

State

Industry

Academic & med institutions

VCs , Accelerators Angels &IncubatorsSkilled

Workforce

Start ups

Total of 6,019 companies1,159 IT &enterprise SW

1,018 Life Science StartupsOut of which 550 in Medical Devices and

210 in Digital Health

PowerOf

DistanceDynamicOpen

Culture

Informal yet Efficient

Society

Strong connections

Direct Feedback

Building Block I: R&D Allocation

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Country Rank 1st 2nd 3rd 4thBusiness expenditure on R&D Israel Korea Japan Finland

Total R&D Personnel in Business Per Capita

Israel Taiwan Luxemburg Denmark

Total Expenditure on R&D Korea Israel Finland Sweden

Nobel Prizes Per Capita Switzerland Norway Israel Sweden

Funding for technological development

Finland USA Singapore Israel

Development and application of technology

Finland Singapore Switzerland Israel

Population: 8 M NL: 17M, MA: 7 MGDP (nominal) per capita: 38K$ NL: 52 K$ IT: 35 K$Unemployment rate: 5.9 % US: 5.8 % IT: 12.6 %Human Dev. Index (Life expt., school, GDP)

#19 (out of 187) NL: #4, US #5, UK #14, IT #26)

R&D Encourages Higher Quality Innovation

16Level of Innovation

Qua

lity

of S

cien

tific

Res

earc

h

Building Block II: Skilled Workforce

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Proportion of Population with Bachelors Degree Among Life Sciences Hubs

Building Block III: International R&D Centers Are a Lifeline for Local Tech Industry

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CASE STUDY: SAMSUNG + Digital Healthcare

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Agenda

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Triggers for Digital Health Investment

Israel- Venture Capital Background

Israel Health Sector

Israel Digital Health Investment

Israeli VC Funds: More Money Flooding into the Market

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Three Key Ingredients of Israel Success

Israel Venture Industry

Israel Health Sector

Israel Digital Health Investment

IVC, 2014

Total Annual Exits: Trended

22 PWC, 2014

Proportion of IPOs to M&A

23 PWC, 2014

Agenda

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Triggers for Digital Health Investment

Israel- Venture Capital Background

Israel Health Sector

Israel Digital Health Investment

GDP Allocation: 7.5% VS 18% of GDP

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Health in Israel: Relatively Good Outcomes

26 OECD, 2012

CVD Mortality in Israel

27 OECD, 2011Israel Ministry of Health, 2013

Ischemic Heart Disease, Mortality Rates

Comparatively Efficient Health System Optimization

28 Israel, MOH; OECD

Factors That Drove Israel Toward Prioritizing Digital Healthcare Adoption

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Multi-Morbidity

Aging

Complexity

Resources Shortage

HMOs bring 24 YEARS of universal, longitudinal EMR data that startups can access

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Example from Clalit, largest HMO with 54% market share

International Recognition: OECD

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“ Israel’s community‐focusedinformation system sets aninternational benchmark inexcellence and demonstratescommitment to quality monitoringand improvement. ”

OEDC Report, 2012

Agenda

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Three Key Ingredients of Israel Success

Israel Venture Industry

Israel Health Sector

Israel Digital Health Investment

Israel Life Sciences Industry by Sub-Sectors

33 IATI, 2015

Source: mHealth Israel Database

140

Source: mHealth Israel Database

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2014 FASTEST GROWING DIGITAL HEALTH CATEGORIES

36 Source: mHealth Israel Database

mHealth Israel Database Breakouts

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