Julien de Salaberry has come to know the Asia Pacific market for over fifteen years. He is now a renowned international investor in the eHealth sector. Based in Singapore, the Briton is the founder and CEO of The Propell Group, a boutique venture investor and advisory company focused on healthtech start-ups.
The businessman told H&TI more about his knowledge of the eHealth market. In this interview, he talk about three important points:
1. The development of Galen Growth Asia, a small company he recently cofounded in order to advance the discussions on health-tech sector across Asia.
2. the characteristics of the investment in Asia.
3. the complexity of establishing a sustainable business model.
Galen Growth Asia: a new concept to boost healthTech innovation
You co-founded Asia Growth Galen at the end of 2015. The company aims to move the debate in the e-health sector forward. How did you get this idea?
Galen Asia Growth is the result of an observation made by several investors and entrepreneurs – including myself – who have met regularly at conferences dedicated to healthtech:
- 1. We realized that we all shared the same vision of the market and that we all discussed the same issues on our side;
- 2. We realized that the quality of the conferences we attended was quite poor.
Therefore, we (three contractors, two investors and a consultant) have decided to found Galen Growth Asia. Our goal is to become a catalyst for the growth of Asia’s healthtech ecosystem. To achieve this aim, we want to create more dialogue between the six stakeholder groups of the sector: the entrepreneurs and their startups, the investors, the major health groups such as Medtech & Pharma (which will attract customers), the government, the media but also the medical experts, usually forgotten, who generally become the users of these new technologies.
We foster discussion among these six key groups by organizing events. We have already set up some (2-3) since our launched and we have two more coming before the end of the year, including the Asia’s HealthTech CEO Summit (December 9th). We plan to gather all the CEOs of the most important healthtech companies in Asia Pacific. This kind of summits already exists in the United States but this is a first one in Asia.
Do you have other projects advance the sector?
We also want to create a single database for the healthTech sector in Asia. It is quite difficult because the databases in China or Korea, for example, are only available in local dialects. So we move slowly to provide quality service eventually. The device should be launched in September 2017.
We also spend some time developing quality studies focusing on very specific areas of eHealth. At the moment, we work on pre-diabetes, a phenomenon that will seriously affect Singapore in five to ten years: the rate of pre-diabetes (12% of the adult population according to official figures) is now almost as important as the rate of diabetes (12.8% according to the International diabetes Federation).
We try to demonstrate that the healthtech can play an important role in this “war on diabetes”. Some devices can encourage pre-diabetics to change their lifestyle to avoid them becoming diabetics. The technology already exists (mobile apps, sensors…) but there is some challenge to overcome: how it would be possible to use it optimally? How to create a better adoption of these tools among consumers?
In the end, our study will present a business proposal. Then, ecosystem players will decide whether they accept it or not. Through this study, we try to link the six stakeholder groups targeted by Galen Growth to make them work together and come to some consensus.
« The patient will be the driver of the Asian eHealth market »
How do you see the eHealth market in ten, twenty years?
I remain optimistic, even though there are obstacles to overcome.
For instance, the high healthcare cost reduce economic growth in some Asian countries. If we look at the pyramid of outcomes, when we are below 5% of the highest paid, pay levels drop quickly. Then, the average wage is between 3000 and 15 000 USD per year. In the US, if you propose these people a rebate code at the launch of a product, you’re quite sure to be in demand. Here, it’s more complicated because the patient has to pay on its own, except in some states such as Australia, Japan and Singapore.
Despite the establishment of a privatized system, health demand is as important in Asia than in Europe and in the United States. And it grows every year because of increased cardiovascular and respiratory diseases, diabetes, etc.
I am confident because population growth is huge and because patients are looking for choice as they pay themselves. Another asset of the Asian market is that the penetration rate of mobile phone is quite high. Asia is the world leader in this field. Thus, m-health is one of the most promising sectors in eHealth.
I think it will be the patient, the individual, who will be the driver of the Asian eHealth market.
The patient may be a driver or a brake… In Europe and the USA, risks related to the use by third parties of personal data often represent a big issue of the development of e-health. Do you think Asian patients are more inclined to accept new technology in their healthcare system?
Europe hides behind the issue of privatization of data. Here, in particular because the average age of the population is lower, people are less cautious on the subject. This means that industry players have more access to patient data.
We realize that there are also a real demand in the data field. In India, for example, about 8.6% of the adult population was affected by diabetes in 2015 and over 52% of these patients were undiagnosed, the International Diabetes Federation says. This means that more than half of the 120 million diabetics in India (by 2020 according to official figures) do not have access to information necessary to the understanding of their disease and so do no get any treatment. This represents a huge market for investors interested in the diabetes sector.
With adapted healthTech, there would be solutions to treat more effectively the sick individuals.
How to do it?
The greatest obstacle is the business model. We need to find a model to provide sustainable technology solutions to patients without the use of philanthropic funds, an option that works well but only in the short term.
In particular, major groups of the healthcare industry should review how they operate. Their cost base is so high that they used to sell at high price their products. Thus, when a healthTech company shows them a low cost solution to enable better diagnosis of a disease in a small town, for instance, they can not afford to sell it because they would not make profit. We must find a viable business model through which each actor involved may earn some money in the sales process.
3 tips for European start-ups which plans to expand in Asia:
Could you give an example of a promising start-up in the Asian market?
The Propell Group has recently invested in ConnexionsAsia, a company now well known in Singapore. They raise US$8 million in Series A funding in January 2015, a sizable Series A.
ConnexionsAsia is first of all a device that allows employers to provide health insurance to their employees through an electronic platform. Therefore, these three actors are connected via a single tool.
This device is required to operate the second service launched by Connexions Asia: a market place offering different healthtech products.
For instance, the website includes MyDoc, a telemedicine service, and GlobeTrekker, a program promoting wellness in companies. Through this second tool, employees can for example be equipped with a Fitbit wristband (pedometer) and try to make every day a number of steps while following a balanced diet. The goal is to improve the health of employees with a fun and controlled approach.
There are a range of different services like this one available online. The employee can then buy on this market place healthcare products directly through its insurance. This operation reduces paperwork: everyone wins time and get simplicity.
Do many startups fail in the Asian eHealth sector?
There is no greater failure rate than elsewhere in the world but yes, there have been failures. There are companies which didn’t do their homework: they arrived in Asia without knowing the reality of the country they had targeted; others ones arrived too early. Some companies specializing in eHealth present ideas too early: the market is not ready for their solutions yet. But this is the same in all regions of the world.
The Swiss theorist Alex Osterwalder, who invented the Business Model Canvas, explained that this is not just a good product that will allow you to have a good place in the market but the combination of a good product and a good business model. This is what I mean. If you have the best healthTech product doesn’t mean you will be the market leader. For that, you have to sell it in the right way at the right time. This is a basic rule that all investors should remember from time to time.
