HealthTech companies will continue to attract strong interest from investors because of their ability to scale.
That’s the view of James Kennedy, partner of Cowgills, who spoke on BusinessCloud’s panel discussion at pro-manchester’s recent HeathTech conference.
Kennedy cited the example of Lancashire-based digital healthcare services partner Redmoor Health, which received ‘significant investment’ from Palatine in October 2022.
He spoke on a panel entitled ‘How data is driving innovation in medicine and healthcare’ and said COVID-19 had shone a light on healthcare businesses.
“There has always been a strong interest in healthcare companies which has become more prevalent post COVID-19,” he said. “In terms of M&A activity, COVID-19 divided the fortunes of certain sectors.
“Those which could demonstrate a greater level of trading resilience to the challenges posed have prospered with enhanced valuations arising from more concentrated capital deployment from investors.
“Technology and healthcare sectors have always been sought after but where you have a company which effectively combines the two, that’s where you achieve best value.”
Kennedy said Chorley-based Redmoor Health was only set up by Marc Schmid in 2017 but generated a huge amount of investor interest.
“They’re a relatively new company but they were tracked by at least 13 private equity houses,” he said. “They’d been keeping an eye on them and spotted a fantastic company with the opportunity to scale significantly.
“Cheshire-based digital health technologies specialist, ORCHA, is another example of a HealthTech business that has attracted a lot of investor interest.
“They are two companies that will be tracked very closely because of the market and their potential ability to scale. An ability to capture and make effective use of data can underpin a successful investment.
“Ultimately, it’s all about the end market. How quickly can the business scale? Technology will always be at the forefront of most successful businesses.
“The end market is the biggest factor, second is technology and third is having the right people to drive that business forward. An expression that has stuck with me is that private equity prefer to back the jockey, not the horse.”
Kennedy was joined on the panel by Emma-Louise Fusari, of In-House Health; Keith Errey, of Isansys Lifecare; and Rory Cameron, of Gendius.