Proving the Business Case for the Internet of Things

Healthcare is the next big thing, says angel investor Andy Richards

Steve Rogerson
December 6, 2016

Health care is the next big target for investors in technology, according to UK entrepreneur and angel investor Andy Richards, speaking at last week’s annual lecture at Biocity, a bioscience incubation centre in Nottingham, UK.
“I can see the whole technology world looking at healthcare and this is the next big place to play,” said Richards (pictured), a founder member of the angel investor group Cambridge Angels. “I was worried three or four years ago that maybe I’d missed the boat. I need to be early in the wave, so I was nervous in the digital health space. I feel more comfortable now I know I haven’t missed the boat.”
He said everyone was trying to move into this space and that made it scary because the industry was struggling with conflicting dogmas – in life science too many people were obsessed with clinical trials and in the technology world they were obsessed with markets.
“As soon as a technology company ends up in a space, twenty other companies join them and they all become obsessed with market share,” he said. “Investors are like sheep; they feel happy in a flock. They then drop prices and even give stuff away for free to get market share, and the market collapses. They can’t get away from revenue growth and as soon as they hit regulations, they veer off into the consumer market with wellness and fitness products.”
This, he said, left a space for real companies that have technologies to help patients.
“When I find that space, that is where I invest,” he said.
One of the problems in the UK, he said, was that too many companies sell out too early rather than growing into large businesses.
“It is harder to do that in the UK than it is in the USA,” he said. “One of the reasons is you have to sell and the NHS [the UK’s National health Service] is very hard to sell into. The US market is more easily accessible.”
Also, he said, the finance to scale at the right time was more often available in the USA than in the UK.
“If the finance is not available to grow, then the logical thing is to sell the company,” he said.
European companies also have a problem when it comes to changing direction.
“Every company that succeeds changes,” he said. “In Europe, they resist change. But they can only change if there is a financial continuum, a culture that likes change and a management that is willing to change.”
Even though he was an opponent of Brexit, Richards believes that now it is happening it may help create this kind of environment.
“Brexit has made elements of the City think about what they want to invest in and some are looking at growth and risk,” he said, “and the can help to scale things.”
Medicine, he said, was moving from a situation where health workers take measurements at one point in time when they arrive at the doctor or hospital and base what they do then on that, to one where the point of intervention happens when there is a change to someone’s continuing profile.
“If you have an iPhone, Apple already has that profile,” he said. “So, the point of intervention will move to, say, when your blood pressure changes in relation to your own profile. The UK could be at the forefront of this because we have the best clinical infrastructure and the NHS. We should be creating and selling to the world. It is about us all working together to make that happen.”
He said to move to continuous real world data will improve diagnosis and create a move more towards prevention than cure.
Richards specialises in healthcare and life sciences. He is chairman of Ixico, Congenica, Abcodia, Novacta Biosystems and Cambridge Temperature Concepts, as well as a director of Arecor and Ieso Digital Health. He was a founder of Chiroscience Group and an executive director through to its sale to Celltech in 1999. He has founded or invested in more than 20 healthcare and life science companies and is a director of Cancer Research Technologies, Babraham Bioscience Technologies and Cambridge University Hospitals Trust, a member of CRUK and a trustee of the British Science Association. He graduated from Cambridge University with a PhD in chemistry and last year was awarded a CBE for services to investment in life sciences.