What is medtech and where will it go next?

A smattering of new technologies is transforming healthcare.

By Jake Mainwaring

Medtech startups are going from strength to strength. Investors have upped the funding dosage injected into the industry every year over the past decade.

However, that doesn’t explain what medtech is or why venture capitalists are so eagerly betting on the sector’s future.

But don’t worry, we’ve got you covered.

What is medtech?

“Medtech” stands for medicinal or medical technology. It is shorthand for technologies used within the medical realm.

Now, technically one could argue that things like scalpels, X-rays and stethoscopes would also fall under this category. After all, they were high-tech when they first popped into the scene and they are, undoubtedly, used by doctors around the planet.

However, the term medtech mainly applies to modern technologies with novel applications in healthcare. In other words: the term refers to high-tech solutions like artificial intelligence (AI) systems and robotics being used by doctors, nurses, pharmacologists and other medical practitioners.

And this prospect has clearly caught the imagination of investors

Investment in medtech is spiking

VCs have backed medtech en masse over the past decade. In 2013, investors injected $914m into the global industry across 220 deals, according to data from research firm GlobalData. The number of deals have climbed year on year since. In 2021, VCs bet $38.2bn on the industry across 1,161 deals.

However, there are signs that the flow of investment could be slowing down. As of July 25, only $11.7bn have been injected into the industry across 506 deals. This could be due to industry being caught up in the same macro economic whirlwinds the war in Ukraine, the end of the pandemic, rising inflation, new regulation to mention a few factors that now threatens to pop the tech bubble.

Time will tell whether investment will cool down like it seems to do for the tech industry in general.

Telemedicine

Medtech has several applications. The first one worth mentioning is telemedicine. In a push to marry health with convenience, tech companies are developing ways that we can look after ourselves from home. Telemedicine became commonplace during the pandemic, and it has persevered; even now many continue to speak to their GPs over the phone. Following the pandemic, telemedicine services have been repurposed as one of the ways technology can help cities beat the next heatwave.

Beyond the pandemic, handheld and wearable remote patient monitoring devices transmit healthcare data to doctors and further innovations place the power to thrive directly into patients' pockets. For example, wearable blood-glucose monitors remind diabetic patients to take their insulin and specialist mobile games help children with ADHD sustain concentration for longer.

Medtech innovators are also increasingly tapping into the Internet of Things, (IoT), a system of wireless, interrelated and connected digital devices. By connecting medical devices to a server, doctors can, for instance, monitor patients' health remotely.

GlobalData estimates that the global market for IoT platforms for healthcare providers will jump from $10.6bn in 2020 to reach $13.3bn in 2025.

AI in medical development

Medtech can also help patients in hospitals in a number of ways.

For instance, tricorders are handheld computers that use sensors, like cameras, to detect a range of health conditions. These time-saving devices, once merely a science-fiction, can now diagnose with at least the accuracy of a physician.

The list of new technologies that will permeate healthcare includes augmented reality (AR). AR headsets will allow surgeons to cycle through different scans of a patient during an operation. Other AR headsets will help to train medical students.

Robotics are already providing help during surgery. Doctors in Seattle already allow robotic appendages to lend a steady hand during minimally-invasive procedures on the brain.

AI has a plethora of applications in healthcare. To mention a few, AI can identify abnormalities on scans that might otherwise go overlooked. AI might also speed up clinical trials. Systems that simulate how a chemical will interact in the body are currently under development.

Interestingly, another AI has even formulated a potential medicine. Supercomputers during Covid-19 also helped to develop the vaccine that enabled us to get back to the new normal, whatever that is. Supercomputers are clusters of interconnected computers with an accumulated processing power that put today’s fastest home desktops to shame.

AI have also been combined with robotics in order to improve the length and quality of life of patients suffering from motor neurone disease.

Nanotechnology

Fascinating developments in nanotechnology continue to broaden the horizons of medicine. Notably, nanomedicine can ensure that chemicals only reach targeted locations in the body. Radioactive medicines are encased in a nanostructure to protect organs, and when the medicine reaches the target location ultrasound is used to break open the casing.

The applications of technology in healthcare are vast and open ended. We have just scratched the surface of the wealth of possibilities in 21st Century medtech.

So it's unsurprising that another few CCs of VC funding for the medtech sector is just what the doctor ordered.

GlobalData is the parent company of Verdict and its sister publications.