Surviving the Big Chill: Insights from the mHealth Panel Discussion

Earlier today, I had the privilege of moderating a panel organized by Levi Shapiro featuring amazing women from Israel's tech and investment sectors. The discussion, titled "Surviving the Big Chill," focused on the current economic and geopolitical climate and its impact on the high-tech, digital health and biotech industries - globally and in Israel.

The panelists, Orly Sternfeld , General Counsel at eHealth Ventures; Sarit Steinberg , a partner at the Israel Biotech Fund ; Miriam Bashan from JAL; and Fiona Darmon ??? , manager of a fund focused on secondary investments, shared their experiences and strategies for navigating these challenges.

Orly emphasized that despite the tough investment climate, eHealth Ventures continues to invest in early-stage companies, particularly in digital health. Sarit reflected on the changing investment landscape, noting a cooling effect on investments in Israeli biotech and high-tech sectors. Initially optimistic, she now sees this shift becoming more pronounced.

"The market has shifted from being seller-driven to buyer-driven. Valuations have decreased, and investors now set the terms."

Miriam shared a more optimistic view, highlighting the strong performance of Israeli startups and significant deal flow despite the challenges. She emphasized the resilience and adaptability of Israeli tech companies. Fiona discussed the surreal nature of the current situation in Israel, highlighting robust activity in mergers and acquisitions (M&A) despite the crisis. She underscored the dual reality of living through a crisis while the investment scene remains active and resilient.

"Despite the turmoil, Israeli startups are performing well, with significant deal flow and strong competition from US-based venture capitalists."

The investment market has shifted from being seller-driven to buyer-driven, Orly noted. Valuations have decreased, but funds like eHealth Ventures remain active, supporting early-stage companies through their incubator programs. Fiona highlighted a global trend of declining investments due to high interest rates and a challenging economic climate but remained optimistic about Israeli technology's resilience.

Both Miriam and Sarit emphasized the importance of focusing on fundamentals. Investors are now more interested in companies that solve real problems. Good companies that address genuine pain points will continue to attract investment. In the biotech sector, understanding market needs and solving specific problems are crucial, Sarit added. Companies must align their innovations with market demands to secure funding.

"Good companies that address genuine pain points will continue to attract investment."

Orly highlighted the importance of technology and market strategy in digital health investments. Startups need to understand their end markets, develop robust commercialization strategies, and navigate regulatory challenges. Strategic planning is critical for success in the highly regulated healthcare sector.

The discussion also touched on the mental health impacts of recent crises, particularly on the younger generation. Fiona shared personal anecdotes about her daughter's struggles with anxiety and the long-term effects of the COVID-19 pandemic on youth. She stressed the need for support systems and innovative solutions to address these mental health challenges.

We discussed how Israeli innovation continues to lead in several fields despite the challenges. I mentioned Israel's high digitization rate of health records (95%) as a significant advantage, though mental health has been historically excluded from this digitization, highlighting a critical gap in comprehensive healthcare data.

The panel concluded with advice for entrepreneurs and investors: focus on solving real problems, understand market needs, and develop strong, adaptable business strategies. Resilience, adaptability, and a clear focus on fundamentals were recurring themes throughout the discussion.

Orly, Sarit, Miriam, and Fiona all agreed that while the investment landscape is challenging, opportunities abound for those who are prepared to navigate the complexities with a clear vision and robust strategy. Their insights underscore the resilience of the Israeli tech sector and its ability to thrive even in the face of adversity.

"It's a global trend. The number in Israel is down 70% in the first quarter. It's a similar figure in Europe. We are in an interesting climate in the cycle, with high interest rates and alternative investment opportunities."

The discussion highlighted the resilience and adaptability of the Israeli tech and biotech sectors. Despite the current economic and geopolitical climate challenges, there remains a strong focus on innovation, problem-solving, and strategic growth. The importance of fundamentals, strategic planning, and the unique strengths of the Israeli innovation ecosystem were emphasized as key to navigating the "big chill."