Investment in Poland's Healthtech: Just What the Doctor Ordered
Technology offers promising avenues for improving access, efficiency, and quality of healthcare at a time when Poland’s health system is dealing with persistent issues such as personnel shortage, out-of-pocket expenses, and long wait times. Telemedicine is emerging as a pivotal sector in healthcare innovation and there is a thriving healthcare startup ecosystem in the country. The main areas of venture capital (VC) investments in Poland were in healthtech solutions, which attracted a total of EUR 168mn in disclosed investment through a total of 274 transactions over 2019-2023. The government also recognizes the importance of healthtech and has revealed plans to allocate EUR 1bn for digital health projects and a further EUR 273mn for medical and health research and development projects.
Poland's healthcare system grapples with persistent challenges, compounded by longstanding issues of underfunding and exacerbated by the COVID-19 crisis. The pandemic laid bare the deficiencies of the system, impacting nearly every citizen. One of the major challenges is the severe shortage of medical staff, with Poland exhibiting a notably lower doctor and nurse-to-population ratio compared to other EU member countries. As of 2022, Poland reported only 3.4 doctors per 1,000 inhabitants, trailing behind the EU average of 4.1 per 1,000, as shown in a report by the European Observatory of Health Systems and Policies, published in September 2023. Similarly, the report shows that the density of nursing personnel in Poland falls short, with just 5.7 nurses per 1,000 inhabitants, in contrast to the EU average of 8.5 per 1,000.
These shortages contribute to higher rates of preventable mortality in Poland, surpassing the EU average, while progress in reducing mortality from treatable causes has stagnated since 2014. Even before the pandemic, access to healthcare services was hindered by long wait times for medical appointments and burdensome out-of-pocket expenses. This is reflected in a decline in life expectancy at birth, which decreased by 0.6 years from 2019 to 2022, settling at 77.4 years, significantly below the EU average.
Growing Popularity of Innovative Solutions in Healthcare
Given these challenges, it comes as no surprise that there is a growing interest in healthtech solutions within Poland. As traditional healthcare strains under the weight of these issues, technology offers promising avenues for improving access, efficiency, and quality of care. Notably, during the pandemic, there was an impressive surge in teleconsultations, marking a significant shift in healthcare delivery. In 2020, these remote consultations constituted 22% of all medical appointments, aligning with the EU average. This proportion decreased to 17% in 2021, yet Poland maintained one of the highest consultation rates per capita in the EU. According to a Eurofound survey conducted in February-March 2021, a remarkable 62% of Polish adults reported having had a teleconsultation since the onset of the pandemic, showcasing one of the highest levels of telehealth utilization across the EU. National data from 2020 revealed that teleconsultations accounted for 28% of primary healthcare visits and for 15% of specialist outpatient care appointments. In 2021, these figures saw a decline to 24% in primary healthcare and 11% in specialist outpatient care. However, there has been a gradual resurgence in these figures since late 2021, as reported by the Polish Ministry of Health in 2023.
The slow yet steady advancement of digitalisation in the Polish healthcare system has opened the way for innovative solutions looking to overcome the deficiencies of the system and contribute to faster and more adequate therapeutic decision-making. Digital health solutions generated by startups in Poland are evolving rapidly, taking into account the changes in the needs of the population. According to the 2023 issue of the survey Top Disruptors in Healthcare, an annual publication by the Polish non-profit organisation AI in Health Coalition, between 2020 and 2021, telemedicine emerged as the dominant sector for Polish healthcare startups, with a significant portion of surveyed startups opting for it. However, this trend experienced a notable decline in subsequent years, dropping to 40% in 2022 and further to 34% in 2023. This shift could be attributed to changing pandemic dynamics and eased restrictions, leading to increased access to traditional medical services. Despite this decline, telemedicine remains a pivotal sector in healthcare innovation, as noted by AI in Health Coalition.
Conversely, medical data has steadily gained traction, becoming the second most favoured sector among respondents in the Top Disruptors in Healthcare survey. Particularly, solutions based on Artificial Intelligence (AI) or Machine Learning (ML) have witnessed substantial growth, with the percentage of startups operating in this domain doubling from 2020 to 2023. Among the 125 Polish startups surveyed between February and May 2023, a total of 60% pointed out that their solutions were based on AI or ML, against less than 30% that selected this field in the first edition of the survey published in 2020.
Although the report by the Polish AI in Health Coalition underlines the diversity of medical startup fields of operation, it is important to note that oncology and cardiology have consistently maintained their popularity. About a third of the respondents in 2023 informed they are specialising in one of these areas. This trend persists from previous years, likely due to the opportunity for introducing cutting-edge technologies and enhancing patient care in critical areas such as cancer and cardiovascular diseases. Cancer and circulatory diseases (including ischaemic heart disease, stroke, and other cardiovascular diseases) are among the leading causes of death in Poland, according to September 2023 estimates by the European Observatory of Health Systems and Policies.
Investors’ Interest
The crucial role of innovations in solving the existing shortages in a sector as important as healthcare is underlined by the fact that the first Polish startup to reach unicorn status, back in 2021, was DocPlanner, a SaaS (Software as a Service) solutions provider for doctors and clinics. Established in 2012, the company is estimated to have gathered EUR 300mn in financing through seven investment rounds, as per the latest available information from September 2023. Notably, in their 2023 Polish Venture Capital Market Outlook, published in January 2024, the Polish investment funds PFR Ventures and Inovo.vc outline that since 2020 the main areas of venture capital (VC) investments in Poland were in healthtech solutions. According to the report, the sector has attracted a total of EUR 168mn in disclosed investment through a total of 274 transactions over 2019-2023. The peak of VC investment in the sector, with 71 registered deals, was in 2021, when the COVID-19 pandemic served as a catalyst and shed light on the intricacies within the healthcare sector, thereby expediting efforts to tackle these issues. While its proportion of overall transactions has been gradually decreasing since 2021, healthtech continued to maintain its leading position in 2022 and 2023. According to the data disclosed in the report, in 2023 Polish healthtechs received a total of EUR 39mn in VC investments, distributed among 66 deals, compared to EUR 44mn attracted in 2022 through 61 deals. On the one hand, this trend shows that more startups have received financing but at a lower value. At the same time, this indicates that investors’ interest in less mature ventures has increased in 2023 against 2022. Some recent examples of investments in Polish healthtech startups include the PLN 2.4mn raised by the SaaS platform eGabinet, announced in January 2024. The solution developed by eGabinet is designed to assist medical facilities in efficiently managing patient appointments and documentation. The funds attracted by the startup came exclusively from business angels (i.e. individual investors). Another important announcement in health innovation was made in December 2023 when Healthnomic, a Polish technology company specializing in the diagnosis of civilization diseases using proprietary solutions supported by AI algorithms, secured PLN 3mn in financial backing. The funds will be used predominantly for a research project focused on diagnosing and treating sleep apnea, to be developed in collaboration with the Polish Military University of Technology.
Funding Sources
In general, the main sources of funding for healthtech startups in Poland include foreign venture capital (VCs), private investors, domestic VCs, grants from European funds, and grants from national funds. According to the 2023 issue of the Top Disruptors in Healthcare survey by AI in Health Coalition, foreign VCs were the most sought-after by Polish healthtechs in 2023, with 75% of surveyed startups expressing interest, indicating a growing reliance on overseas investors for capital and strategic support. Private investors have also become increasingly important, with 71% of startups considering them as a funding source. Additionally, grants from European and national funds play a significant role, with 62% and 45% of startups, respectively, expressing the need for such financial assistance, marking a notable increase from the 2022 edition of the report.
Government Initiatives
As Poland prepares to take the helm of the Council of the EU in January 2025, its government has already expressed (in February 2024) a commitment to advancing the digital transformation of healthcare, signalling a promising era for health technologies in the country. With strategic priorities set by the government and significant investment inflows from initiatives such as the National Recovery and Resilience Plan, Poland's healthcare sector is poised for substantial growth and innovation. Notably, under its Recovery and Resilience Plan, the country plans to allocate EUR 1bn for digital health projects and a further EUR 273mn for medical and health research and development projects. In June 2023, the national administration presented its strategic objectives for the development of eHealth in Poland over 2023 - 2027, prioritising, among others, the need for collaboration with medical software providers to advance the digitalisation of the healthcare sector. This includes intensifying cooperation with such entities through projectathons - workshops focused on integrative testing. The goal of such initiatives is to allow software providers to test their systems' compatibility with central and service providers' systems.
During the years after the COVID-19 pandemic, Polish healthtechs enjoyed strong interest from investors and ranked as the most appealing sector for venture capitalists. As the need for innovation in the healthcare system becomes increasingly important for the official authorities in the country, the growth perspectives for Polish startups focused on health services look promising.
The original news article and data contributions have been taken from the EMIS database.
Original source: EMIS Insights