Changing Landscape for Non-Face-to-Face Treatment Companies in the Funding Market
In the midst of the COVID-19 pandemic, the financing situation for non-face-to-face treatment companies, previously considered a ‘trend’ in the unlisted bio-investment market, has undergone a significant transformation. Although two companies were able to secure funding in May, the total amount raised decreased substantially compared to the same period last year. Furthermore, the type of businesses attracting investment differed greatly from the drug delivery platforms that previously dominated the market. The introduction of government regulations and the narrowing scope of non-face-to-face treatment have also impacted the funding landscape.
Shifting Investment Landscape for Non-Face-to-Face Treatment Companies
Based on an analysis conducted by Hit News on May 25th, two non-face-to-face treatment companies completed financing last month. ‘EverX’ raised 800 million KRW in series A funding, providing rehabilitative exercise treatment for musculoskeletal patients. Meanwhile, ‘Celta Square’ secured 50 million KRW in seed round funding, offering a pharmacovigilance (PV) platform.
Although the number of non-face-to-face treatment companies attracting investments remained the same as last May, it is important to note the significant difference in the funding amounts secured. In May 2020, companies like Dr Now (4 billion KRW) and Good Doc (2.1 billion KRW) received substantial investments and became major players in the healthcare sector. However, the non-face-to-face treatment companies receiving funding last month have showcased a different nature of business.
Shift towards Innovation in Non-Face-to-Face Treatment Companies
The recent funding results have raised questions regarding the marketability of drug delivery businesses, such as Dr Now, which previously dominated the investment scene. Despite the anticipation of high growth in drug supply due to the COVID-19 pandemic, it appears that these businesses are now facing challenges.
Interestingly, the temporary allowance of non-face-to-face treatments and pharmaceutical deliveries during the pandemic led to a significant increase in monthly active users (MAU) for each company. Investors were attracted by the growth trends in sales and services, which highlighted the trustworthiness of the data.
New Focus on Monitoring Capabilities in the Non-Face-to-Face Treatment Market
This year, the government decided to regulate the pharmaceutical distribution market, which had previously been temporarily allowed due to social distancing measures during the pandemic. This decision marked a turning point for the industry.
While returning patients are still allowed to receive medication through non-face-to-face channels, the MAU of related companies has drastically decreased this year. Some companies are considering changing their business or even exiting the market altogether, realizing that the future may be uncertain.
As a result, investment sentiment in the non-face-to-face treatment market is expected to shift towards companies with strong monitoring capabilities rather than focusing solely on drug delivery. GB Soft, another successful company that raised funds this year (4 billion KRW in series A funding), is pioneering a contactless biosignal measurement solution. Among all the companies in the non-face-to-face treatment market, only Medir (6.6 billion KRW in ex-series A funding) has managed to secure funding based on the provision of medicines.
The Need for Adaptation and Planning in the Non-Face-to-Face Treatment Market
An industry insider emphasized the importance of innovation for non-face-to-face treatment and drug delivery companies. Overcoming resistance from the medical community, addressing security concerns, and bridging the gap between traditional and digital healthcare services are seen as crucial steps. With the current government policies making it difficult to operate normal services, companies must prepare pivot strategies or consider appropriate exits to navigate these challenging circumstances.
It was found that the financing situation of non-face-to-face treatment companies, which was evaluated as a ‘trend’ in the unlisted bio-investment market in the middle of Corona 19, has changed dramatically. Although two companies managed to raise money in May, there was a significant reduction in total funding compared to the same period last year. The nature of the business that managed to attract new investment was also very different to the drug delivery platform that had led the market. Regulation-oriented policies, such as the government’s move in response and the narrowing of the scope of non-face-to-face treatment after ‘return’, also affected the funding market.
According to the aggregation and analysis by Hit News on the 25th, two non-face-to-face handling companies completed financing in May (based on the payment date of the stocks). ‘EverX’, which helps rehabilitate exercise treatment for musculoskeletal patients, raised 8 billion won in series A, and ‘Celta Square’, which serves a pharmacovigilance (PV) platform, raised 500 million won in seed round.
The number of faceless handling companies that managed to attract investment was the same as last May (two). Given that the unlisted bio and healthcare investment market has shrunk sharply since the second half of last year, it can also be interpreted that non-face-to-face treatment companies have performed well in the funding market.
However, there was a big difference in the amount of money secured compared to last May. The non-face-to-face treatment companies that completed funding in May last year were Dr Now (40 billion won), which quickly emerged as the biggest buzzword in the healthcare sector, and Good Doc (21 billion which won), attracted the most investment among healthcare companies that completed a Series A.
Unit: KRW 100 million / Source = Recreate popular news
The reason for the large difference in funding scale compared to the same period last year is that the business nature of non-face-to-face handling companies, which completed their investment last month, is different from the previous trend of ‘delivery medicine’. In the case of EverX, artificial intelligence (AI) has been applied to the platform, but it provides a non-face-to-face service in the form of assisted exercise rehabilitation treatment. Celta Square is also looking for a way out with a specialist business that applies AI to pharmacovigilance (PV) rather than drug supply.
What is worth noting is that the marketability of the drug distribution business led by Dr Now, who previously led the investment market, is being questioned. Even at the time of the COVID-19 pandemic, it has produced satisfactory funding results amid expectations for high growth in drug supply.
In particular, when non-face-to-face treatment (first visit and return visit) and the delivery of medicines, which were previously unacceptable, were allowed temporarily in the face of social distancing, each company secured hundreds of thousands of monthly active users (MAU) through his platform. The background of securing trust from investors was the fact that the data, which is interpreted as a growth trend of sales and services, was brought to light.
This year, the government decided to more or less regulate the supply of drugs, which was ‘temporarily allowed’ in the social distancing policy to respond to the Corona 19 pandemic crisis. This was a turning point for the pharmaceutical distribution market.
Although all related industries and ministries have decided to allow the dispensing of medicines for returning patients, except for first-time visits, in communication, it is known that the MAU of related companies has dropped sharply this year. It is said that companies that have judged that there is no future and are considering changing their business or going out of business are starting to appear.
Accordingly, investment sentiment in non-face-to-face treatment is expected to focus on ‘monitoring’ capabilities rather than drug delivery for the time being. Another faceless manipulation company that successfully raised funds this year, GB Soft (Series A, KRW 4 billion) is also pioneering a contactless biosignal measurement solution. This year, based on the cumulative basis, only Medir (ex-series A, KRW 6.6 billion) has managed to raise money with the supply of medicines.
An industry insider said, “In the case of non-face-to-face treatment and drug delivery companies, innovation is at the forefront, but this seems to be the first thing to ease the resistance of the medical community, which’ n see the attempt. itself negative due to security concerns, and narrowing the gap between them.” “Since it is difficult to operate normal services under the current government policy, there is a need to prepare a pivot strategy or an appropriate exit,” he said.
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