How U.K. State Healthcare Is Nurturing Healthtech

How U.K. State Healthcare Is Nurturing Healthtech

Serving a population of 68 million, the United Kingdom’s publicly-funded National Health Service (NHS) spent around £239 billion in 2023, amounting to 11.1% of gross national product. Its massive – although not quite monolithic – presence as a healthcare provider represents both an opportunity and a challenge for startups working in health and medical technology. On one hand, the NHS is keen to deploy new technologies, both to drive efficiency and deliver better health outcomes. On the other hand, startup companies may struggle to speak to the right people and address all the necessary regulatory requirements.

So what are the realities of marketing new digital products to the U.K. health system if you run a small and modestly-funded company?

A case in point is Strolll, Established in 2019, it has developed an augmented reality platform that uses gamification tools and audio and visual cues to either support the rehabilitation or arrest the decline, of people suffering from neurological conditions, such as Parkinson’s Disease. In addition to trialing the product within the NHS, Strolll has just signed a collaboration agreement with U.S. healthcare provider Cleveland Clinic. Speaking just ahead of the deal’s official announcement, I was keen to ask CEO co-founder Jorgen Ellis about the company’s route to a potentially international market from within the U.K.’s health ecosystem.

As he explains, it was co-founder Thomas Finn who framed the concept. Having seen how something as apparently simple as coloured lines placed on a floor had helped his father – who was suffering from Parkinson’s-like symptoms – to walk, he thought the same therapeutic benefits could be achieved more efficiently by using software developed for augmented reality glasses. Ellis, who cut his entrepreneurial teeth by founding a flatpack furniture business in his native New Zealand, came on board as CEO shortly afterwards. “We had £50 in the bank account – it was right at the beginning,” he recalls.

So how did the augmented reality tool move from concept to reality? There was a lot of groundwork to do. Initially, the company worked with a university in the Netherlands to research the concept and gather clinical evidence that the therapy could be successful. This opened the door to research funding of around €0.5 million to support product development, Seed funding of $1 million followed as the company worked to create an MVP while also securing regulatory approval in the U.K.. “Then we secured our first couple of NHS contracts,” says Ellis.

NHS Partnerships

As Ellis stresses, the company’s ability to gain traction was due in no small part to the willingness of the NHS to engage with relatively young companies. Support for innovators is today baked into the policies of the organization as evidenced by a range of programs that provide both funding and access. For example, the Health Innovation Network, connects researchers and startups with health professionals. The Small Business Research Initiative for Healthcare runs competitions designed to allow startups to respond to challenges. The Innovation Pathway offers a means for businesses to access NHS expertise as they develop their products. The NHS Transformation Directorate is seeking to drive the digital transformation of the service.

And as Ellis explains, partnership with NHS bodies has been vital to Strolll’s progress to date. “The NHS has been a good partner. And actually, the NHS has a lot of really good organizations that support innovators to develop their technology and get across the chasm from pilot to adoption,” he says.

However, Ellis stresses that it isn’t an easy process. “You have to put in a lot of work,” he says. “For instance, we worked with Leeds Teaching Hospitals for about two and half years. We also listed ourselves with the Innovation Service, we have worked with the Health Innovation Networks and we have been round to a lot of NHS trusts.(the bodies that manage services at local level)”

It’s important, he says, to talk not just about the clinical benefits of a particular product but also to talk to managers about the constraints they work under in terms of budgets, staffing and resources.” These conversations with multiple stakeholders enable the NHS to take a view on the relationship between the cost and benefits of any particular system, while also giving the technology provider unique insights into the requirements of the buyer.

“For us, it all comes down to is the question of how do you scale rehabilitation services with technology. We have really focused on helping healthcare providers to achieve that.”

Funding Opportunities

The nature of the relationship between innovators and the UK health service has an impact on the way startups are funded. Put simply, grant money is available. To date, Strolll has raised $3.7 million in equity funding and £7 million from grants. The next step is a Series A.

Ellis says companies working in this sector should also address regulatory compliance from the earliest possible stage, adding that one of his earliest hires was a regulation specialist. In addition to clinical regulations, cybersecurity and data management policies are crucially important, particularly as the NHS presses ahead with digitisation plans.

Strolll’s collaboration with Cleveland Clinic is now opening up a new phase in the company’s development. Under the terms of the $3 million agreement, the U.S. healthcare provider is taking an equity stake in the U.K. company. In addition, a therapeutic tool developed by Cleveland Clinic will be integrated into the Strolll platform. Using the AR system, the clinic says there is an opportunity to extend its therapy into the homes of patients.

For Strolll this is opening up a new frontier. “Our focus now is on the U.S.,” says Ellis.

That said, the U.K. ecosystem is potentially very fertile ground for healthtech companies and that is reflected in the investment figures. According to a recent report by Galen Growth, ventures in the sector raised $835 million in 2023. Despite a downturn from earlier peaks, the report says Britain remains the biggest sector ecosystem in Europe. Arguably, m,uch of that is due to support from the NHS.

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