IBM and Medtronic are part of a group that have won a grant from the Israeli government to open a digital medicine incubator, according to a statement from the Office of the Chief Scientist with the Israeli Ministry of Economy. It’s part of a long-running economic stimulus program to improve investment in Israeli technology startups and create jobs.
The statement was translated from Hebrew with Google Translate.
In addition to Medtronic and IBM, Health O2 includes Pitango Venture Capital and Rambam Hospital, and will be based in Haifa. It was one of four groups to be selected in the latest round of the 23 year-old program. The goal of the incubator project is to have companies with the experience and resources to screen promising ideas, help them shape and develop these early stage businesses and bring them to the point where they can secure venture capital backing.
Health Executives on Digital Transformation in Healthcare
Hear executives from Quantum Health, Surescripts, EY, Clinical Architecture and Personify Health share their views on digital transformation in healthcare.
Incubators are given budgets ranging from $500,000 to $800,000 and 85 percent of that comes from the government through a grant — the rest is financed by the incubators. Each early stage company in the program pays the government 3 percent to 5 percent of royalties from the revenue they generate until the full amount of grant, including interest, is repaid, according to a website for the program.
Although many of the companies that have come through the program are in the life science sector, digital health has been an emerging trend. A group that includes the Cleveland Clinic targeting digital health startups is in the running for the fifth round of the incubator program, which is expected to close in December.
The overarching goal is to make Israeli startups competitive in the U.S. market. The healthcare landscape is much different in the U.S. than in Israel, where there’s universal healthcare and health maintenance organizations dominate, but with healthcare reform digital health is gaining acceptance.