Opportunities for German stakeholders: healthcare startups in Poland

The startup ecosystem in Poland is picking up pace. Its drivers are a relative abundance of young and tech-savvy workforce, the significant size of the domestic market and, occasionally, generous government funds. There are windows of opportunity for a cooperation with German stakeholders.

One of its emerging vertical niches is healthcare. Early winners in this sector are inspiring a subsequent wave of entrepreneurs. The most significant success to date is Medicalgorithmics. This company has created an easy-to-use cardio monitoring device, certified it for the affluent US market and went public with current valuation of around US-$ 250 mn.

Another inspiring example, albeit still in the growth phase and not yet public, is Docplanner. This marketplace for medical services links patients with physicians who provide consultations. After capturing significant traffic volume in Poland, it expanded to a number of foreign markets, finding success mostly in countries such as Russia, Turkey, and Mexico. According to media reports, its current valuation is around US-$ 100 mn.

Map of healthcare startups in Poland

So what are the newcomers and in which areas they operate? The authors of this article created a map of healthcare startups, aiming to capture the most active ones by scoring three success factors: the size of the full-time team, market readiness of the product, and equity capital acquired to date.

PolenMap

This is an overview of examples from each category, link: https://www.gdziepolek.pl/blog/najlepsze-polskie-startupy-medyczne-wedlug-gdziepolek

In Diagnostics, the best staffed and funded startup is Infermedica, which works on an AI-based symptom checker to enable self-diagnosis by patients by talking to a bot using natural language.

Harimata works to detect early signs of autism through tablet-based games. The startup already has German VC investors and is exploring the German market.

StethoMe creates a cloud-connected stethoscope that can be used at home for a quick diagnosis.

There are a lot of activities in the therapeutic area. As far as product developers go, Bioacoustic developed an innovative device for treating hearing loss by stimulating the brain with sound of a precisely selected frequency.

Another product developer is Pelvifly, which provides a hardware and software package for patients to train pelvic floor muscles – helping to deal with urinary incontinence or improving the quality of sexual life.

In the pharmaceutical field, which shows less activity, the authors of this article position their own „Where I Get My Meds“ (GdziePoLek.pl) marketplace, which has real-time stock data from pharmacies and can show patients where their medication is immediately available. This startup is planning funding and development in Germany.

Three other pharmaceutical startups include a pharmacy automation company and a robotic drug dispenser. They are in product development and testing phase.

In the education and assisted care category, venture-funded DrOmnibus produces solutions for assisting therapy of children with mental deficiencies, while MySpiroo helps people suffering from asthma with a cloud-connected spirometer.

Funding

What is immediately visible is that compared to Western peers, Polish startups make do with relatively little external capital.

Previously mentioned Docplanner is a behemoth in this regard, with tens of millions US dollars already raised, which it already deployed to fund foreign acquisitions (Doctoralia from Spain) in addition to organic growth. No other project has succeeded in raising more than a couple million US dollars.

The reason is a lack of domestic venture funds capable of providing sufficient funding for scaling up international companies. Government initiatives provide, in good times, ample capital to fund early efforts, with a large number of subsidies with approximately 100,000 euro ticket size; when it gets to putting in US-$ 1 mn and more, however, Polish funds are too small to pick up the tab.

Startups navigate around this weakness by either seeking funding abroad (Docplanner was mostly funded by Berlin’s Point Nine), doing an early IPO on rather well developed Warsaw’s small caps market, which is especially popular among developers of medical devices, or acquiring funding by private instead of venture investors, like the authors’ startup did.

Opportunities for cooperation between Germany and Poland

The relative scarcity of funding available at growth stage with, at the same time, abundance of talent makes it possible for German funds to make attractive investments, as Docplanner and Point Nine example have proven.

The Polish government is also open for foreign funds to co-invest with government’s own programs in order to inject know-how into the investment process and supplement limited capacity of domestic funds.

From an operational point of view, Poland might be a good starting point for healthcare startups due to its dynamic and quite liberal private healthcare sector.

The largest private medical operators, like Medicover Group, serve millions of patients and are eager to implement innovations – both to differentiate themselves and to keep costs under control in this provider market which also has a scarcity of physicians. It might be easier and quicker to have physicians or patients apply new solutions in Poland compared to Germany.

Poland has been embraced as a testbed for innovations both by healthcare corporations who have a presence here, like Bupa, as well as in other sectors, like fintech: touchless payments reached mass scale in Poland as one of the first countries in the world due to an aggressive push of highly competitive banks.

Getting to know the right startups

One of the obstacles for getting involved with emerging startups is the sheer number of healthcare initiatives (the authors reviewed more than 100) and the effort required to distinguish those focused on actual work from those presenting themselves on never ending stream of startups conferences, roundtables and competitions, which nowadays take place on something like a weekly basis.

Healthcare is a vast and complicated field which creates plenty of space to impress non-specialized investors with a nice story and futuristic visuals – which is not specific to Poland, as Theranos has proven. That’s why the authors created a map based on actual activity, rather than flashy pitches.

Stakeholders interested in additional information are invited to get in touch for a personal walkthrough of a specific area.

Bartłomiej Owczarek is a founder of GdziePoLek.pl (in Germany: inderApotheke.de)

Contact: bo@inderapotheke.de, Twitter: @bowczarek

Full report in Polish: Startupy medyczne w Polsce.

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