Following Frontiers Health 2023, I had the privilege of sitting down with Dominick Kennerson to delve deeper into the mission of HSBC Innovation Banking and the future trends shaping health.
Can you tell us a bit more about what HSBC Innovation Banking is, and what the organisation is aiming to bring to the health tech space?
HSBC Innovation Banking is a commercial bank that provides flexible banking solutions designed specifically for start-ups, scale-ups, investors. We bring a wealth of experience and expertise to the table, and thanks to our position as part of HSBC, we remain committed to supporting innovation and driving growth in sectors that are shaping our future, including health technology (HealthTech), around the world.
Within the health tech arena, HSBC Innovation Banking aspires to provide holistic financial solutions tailored to the distinctive challenges faced by companies navigating this innovative field. Recognising the nuanced needs of HealthTech enterprises at various stages of development, from inception to maturity, HSBC Innovation Banking endeavors to streamline access to capital, offer customised financing options, and facilitate connections within global networks. This commitment ensures seamless growth opportunities for HealthTech visionaries.
HSBC Innovation Banking has a wide perspective across the innovation economy. What do you think are the key trends or technologies reshaping the health tech space?
The health tech landscape is evolving rapidly, and we at HSBC recognise the key trends and technologies that are reshaping this dynamic sector. AI, Big Data and Analytics will enable the digital transformation of healthcare. By staying abreast of these innovations, we aim to provide unwavering financial support to HealthTech companies propelling positive change in the industry.
Over the past few years, Europe has been “catching up” to the US in terms of activity, if not scale. Do you see that trend continuing?
Maybe. Europe is a region with a diverse economic landscape, comprising advanced economies at the forefront of competitiveness, innovation, and productivity, as well as economies that are still in the process of catching up.
There are a few challenges for the European pre-seed companies, that are related solely to the traction they have in their countries so scaling to the US may prove to be difficult. What makes scaling to the US complicated is the lack of consistent transatlantic investors between US and Europe, which contributes to Europe’s post-Series A chasm.
What’s the reality to work with Pharma?
Drawing from my background in the pharmaceutical industry, I want to shed light on the challenges of navigating procurement processes within large enterprises. It’s crucial to understand that having just one primary source of revenue, especially from pharmaceutical giants, can pose significant risks. The multifaceted nature of how pharmaceutical companies operate, along with the potential challenges in payment dynamics, adds a layer of complexity that necessitates a thoughtful approach.
From a banking standpoint, a healthcare company with fluctuating revenues from a government might be perceived differently than a consumer-focused company with more predictable metrics.
What are the key criteria applying when you evaluate digital health companies?
When evaluating digital health companies for financing, I apply several essential criteria, with one prominent factor being the presence of multiple revenue sources. This criterion plays a crucial role in reducing risk and promoting the development of resilient revenue models.
Diversifying revenue sources is strategically important for digital health companies due to the industry’s ongoing evolution. Understanding diverse several revenue streams and actively mitigating risks through diversification becomes vital for long-term success. Encouraging companies in the digital health space to explore and establish multiple revenue streams not only enhances their appeal for financing but also fosters the growth of robust businesses capable of thriving in a dynamic and ever-changing landscape.
When digital health companies demonstrate at least three distinct revenue sources, HSBC Innovation Banking is likely more able to support these potentially more resilient business models. This criterion may act as a de-risking lever, helping companies fortify their revenue models and build stability in their operations. By encouraging the establishment of multiple revenue streams, we aim to improve the attractiveness and resilience of these companies, enabling them to navigate the evolving landscape of the digital health industry successfully.
What do you think “health” will mean 10 years from now?
In the next 10 years, the concept of health will undergo a transformation, encompassing more than just the absence of disease. While the fundamental definition of health will remain the same, there will be a shift towards a more holistic approach.
I firmly believe that health extends beyond medical diagnoses and treatments. It will be seen as an integral part of everyday life and decision-making processes. To achieve this, we need to work towards an integrated care model where individuals receive information about their health rather than simply providing it. This approach goes beyond the traditional “patient-centric” model and embraces a proactive and participatory approach to overall well-being.
In this future vision of health, individuals will have access to a wealth of information, tools, and technologies that empower them to make informed decisions about their own health. It will involve a collaborative effort between healthcare providers, technology innovators, and individuals, working together to optimise health outcomes.
