Andreessen Horowitz March 27, 2023
The public market situation for healthtech can seem pretty depressing. Recently IPOed healthtech stocks are underperforming the broader market, with some falling 95%+ from their IPO—meanwhile, more traditional companies like UnitedHealth and Eli Lilly are near all-time highs.
Unsurprisingly, some in the healthcare community have begun to extrapolate these disappointing results to the broader landscape of venture-backed healthtech companies and the thesis behind it: can real, high-growth, high-margin, highly defensible businesses be built in healthtech?
Our answer: yes, absolutely.
The most important companies in healthtech—and those that make the most enduring impact on the greatest number of patients—will take advantage of the opportunities in healthcare (namely: enormous spend, disproportionate labor-to-capital ratios, and high switching costs) by deploying the strategic advantages...