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Only ten years ago, after making my first investment in a cybersecurity company, I was in a go-to-market strategy meeting with one of the executives. We were discussing which industry to begin selling to first. Included in the list were Financial Services, Manufacturing, Retail, Education, Infrastructure, etc. Healthcare was at the very bottom of the priority list. “Why not healthcare?” I asked - after all, the privacy and financial threats were obvious, the attack vectors varied and vulnerable, not to mention the physical risks to patients. The response: “Oh, healthcare is very behind on technology and the sales cycle is painfully long.”
The same ten-ish year ago Marc Andreesen stated: “Software is eating the world.” That was sure to apply to the healthcare industry, which is notoriously a decade behind on technology adoption. Using venture capital funding as one metric, in 2011 $1.2 billion were invested across 79 healthcare tech deals. In 2021, $29.1 billion was invested across 729 deals. The adoption of electronic medical records software and other technologies (such as remote patient monitoring) via regulatory push, consumer demand partially driven by younger generations and the pandemic, and increased inefficiencies in healthcare has completely transformed the digital landscape for this massive industry. The trajectory of digital healthcare has accelerated only in the past five years.
Accordingly, cybersecurity professionals and companies are presented with an enormous opportunity to help healthcare companies adopt new technologies while putting the people, process and tools in place to keep their patients safe and navigate the complex regulatory, legal, and compliance landscape. This won’t be easy: the attack vectors are plenty - the healthcare tech stack includes a wide variety of IoT devices, software vendors, specialized equipment and physical environments; and user access and management requirements are intricate given the number and types of stakeholders involved. The stakes are higher than ever since the risk is patient safety.
“We are looking forward to investing in founders building innovative cybersecurity solutions for healthcare”
According to the Herjavec Group, the healthcare industry is the most breached industry, with a 51 percent % increase in breaches and leaks since 2019. In recent years, ransomware has been at an all time high across every industry and company size, and in 2020 alone 560 healthcare facilities in the U.S. reported ransomware attacks. This has cost healthcare companies $9.23 million per incident (versus $4.25 million in other industries). 70 percent % of surveyed organizations reported that healthcare ransomware attacks resulted in longer hospital stays and delays in procedures and tests. I’ll never forget reading a story ten years ago about a patient dying from his pacemaker being hacked. The direct effect cyberattacks and ransomware has on patient data and lives is scary.
At Indicator Ventures, we invest in extraordinary founders building industry defining tech companies at the earliest stages. We increasingly began investing in digital healthcare years ago and experienced the uptick in digital adoption. We are looking forward to investing in founders building innovative cybersecurity solutions for healthcare. Most recently, we invested in a cloud-native data loss and exposure prevention company called Polymer, whose earliest customers are healthcare companies. Polymer is helping customers such as Signify Health and Medly Pharmacy with data governance, insider threats and privacy regulations such as HIPAA, PCI, ISO 27001/27701. We need more entrepreneurs like Yasir Ali at Polymer willing to take on the complexity and challenges of securing the healthcare industry against evil attackers.