Who’s who of the domestic digital healthcare sector have got together. The reason: to promote digital healthcare startups. They are Choi Yoon-sup최윤섭, director of Digital Healthcare Institute, Jeong Ji-hoon정지훈, a professor at Kyung Hee University, who is also a doctor and an IT fusion expert, and Kim Chi-won김치원, head of Seoul Wise Hospital who is also an internal medicine specialist and a former consultant at McKinsey and Co. They set up Digital Healthcare Partners (DHP) in June last year.
DHP is Korea’s first “accelerator” – which discovers startups and provides consulting and marketing services for them – targeting only digital healthcare startups. Last month, DHP brought in 11 partners, including specialists from pediatrics, dermatology, ophthalmology, endocrinology, and family medicine, a licensing expert from the Ministry of Food and Drug Safety, a lawyer, a UX (User Experience) expert, and an accountant. The 11 partners are also famous in their respective fields. To cultivate innovative digital healthcare companies, DHP provides “accelerating” related to medical consultation, medical community network, clinical verification and investment attraction for early-stage startups that have yet to receive Series A investment (investment made in the process of making legitimate products or services).
To further enhance expertise, DHP additionally recruited a patent attorney and a venture capitalist as advisors. Particularly noteworthy was the joining of Dr. Kang Hyun-suk, a medical director of the U.S. genetic information analysis startup, "Counsyl," to help overseas advances by accelerating startups.
An increasing number of startups are also accelerating. Last December, DHP invested in “3 billion,” which diagnoses rare diseases by analyzing genetic information, and has since brought it up. More recently, DHP has decided to accelerate “Dr. Diary,” an application that manages diabetes. DHP is also examining to accelerate a startup, which produces a simulator using virtual reality technology and allowing doctors to practice cataract surgeries.
Choi Yoon-sup, the managing partner of DHP, said the role of DHP is to “discover, nurture, connect, and invest in digital healthcare startup companies." Unlike general startups, digital healthcare startups need accelerators specializing in that area, where numerous interested parties, such as hospitals, patients, insurers and the government are linked to one another. This is why the 14 experts who also work in their respective profession, have come together to start DHP. Korea Biomedical Review met Choi to discuss digital healthcare startups’ ecosystem.
|Choi Yun-sup, the managing partner of Digital Healthcare Partners (DHP), talks about the reasons he set up an “accelerator” targeting digital healthcare startups for the first time in Korea, and the company’s purposes.|
Question: Many people are unfamiliar with the concept of digital healthcare startup “accelerator.” What does DHP do?
Answer: An “accelerator” is a business that fosters and invests in startup companies in their early stage. DHP’s role is to discover, nurture (along with professionals from various fields), connect, and invest in digital healthcare startups. DHP will find innovative digital healthcare startups and prep startups phase to support them by verifying their items, conducting clinical research and providing licensing consulting. In particular, digital healthcare area needs cooperation with the medical community, including hospitals. Many startup managers, however, often have no connections with the medical community. DHP can solve these problems. If DHP can help startups grow into successful businesses and raise their corporate value, it can make financial profits, too.
In the United States, there are accelerators specializing in the healthcare field, such as “Rock Health” and “Healthbox,” Korea had none. DHP is the first accelerator specializing in digital healthcare startups in this country.
Q: Do you have some criteria for choosing target startups?
A: Basically, the selection process has two steps. To find innovative digital healthcare startups, we hold the DHP Office Hour once a month. We invite a startup or prep startup team with innovate ideas and provide free consulting in a private setting and grasp them in the process. If we select target startups in the first round, we make investment screening by evaluating their commercial viabilities and vote on the companies. If more than half of the 14 partners agree on a candidate, we select it as a startup for nurturing. “3 billion” and “Dr. Diary” also went through this process.
Q: Other than the fact that DHP is targeting only digital healthcare startups, how can you set DHP apart from other accelerators?
A: After we select startups to accelerate, we put them in our long-term mentoring program. The existing accelerators nurture startup companies only for four to six months, but in the digital healthcare field, it 's hard to produce outcome in six months. That is why DHP has two partners consult each startup company for six months to every detail. In the case of “Dr. Diary,” a diabetes management app, for example, two partners -- Kim Tae-ho, a physician specializing in internal medicine, and Shin Jaewon, a family medicine specialist who is also the president of “Mobile Doctor” – will exclusively consult it.
When the six months of mentoring by exclusive partners are over, we hold a “demo day” -- an event that presents the startup companies’ ideas to investors -- with the participation of venture capitalists. If the startup companies need more help afterward, they can receive partners’ advice.
Q: Recently, a patent attorney, venture capitalist, and others have joined as advisors.
A: Quite literally, they act as advisers. In particular, we recruited Dr. Kang Hyun-suk, medical director of “Counsyl,” a U.S. genetic resources analysis company, as an advisor to help domestic startups’ overseas advance. There are so many regulations in Korea that they should aim at moving to the U.S. or China in the long term. Succeeding with the domestic market alone is difficult. “As Kang is a doctor working at a startup company in the Silicon Valley, he can offer realistic advice.
Q: You said there are many regulations in Korea?
A: The regulations are particularly heavy in the healthcare area. I feel often frustrated to visit councils run by the government and talks with their members. I hope that the government will minimize its role and relax regulations on the private sector.
Choi said he plans to maintain the current scale of DHP comprised of 14 partners. The reason is to protect social values pursued by DHP. It can make financial profits by raising the corporate values of startups, but that is not the company’s priority goal, he adds. The 14 DHP partners, including Choi, put the priority on discovering innovative startups that seek social values and creating such an ecosystem.
Q: What does DHP seek?
A: I hope an innovative healthcare startup company will come out in Korea. Medical and healthcare fields treat and prevent diseases, so they can’t help but have social significance.
And therefore it is our first goal to turn out an innovative startup, which, at the same times, racks its brain how to maximize its social value.
Innovative startups find it hard to grow without an ecosystem. There are no such ecosystems for digital healthcare startups in Korea now. Although there are many interested parties, they do not know how to co-prosper. DHP may not be able to create the entire ecosystem alone, but I think it is possible to build a foundation through nurturing several startups. Financial gains cannot come ahead of these two goals. Other partners in DHP share the same idea.
The reason we use the word “partners” in our company title and call one another partner was because we wanted to operate it in a self-reliant and mutually respecting atmosphere. It is an honor for me to work with best experts representing various areas.
Q: So are you not going to receive external investments?
A: There are already many people willing to leave their investment funds in our hands, but we turned them down. It’s not only because we are not experts who manage funds but also we wanted to operate the DHP fund independently. Nor will likely be of help for creating the ecosystem. We refused to accept their proposal out of concerns that it could erode values pursued by DHP.
Q: What is the short-term goal of DHP?
A: With the money gathered from partners, we can invest in seven startup companies.
We have already decided to invest in two startups. By the middle of next year, we aim to find more startup companies and use up the money we have. The other goal is to help the seven startup companies we have selected receive subsequent investments.
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