Kaiku Health is an excellent example of a Finnish healthtech company shooting for the stars. The new owner Elekta, a global leader in radiotherapy technology, provides a global sales channel for Kaiku’s digital patient-monitoring platform. Tesi’s Investment Director Joni Karsikas and Kaiku’s CEO Lauri Sippola discuss Kaiku’s plans and the state of the healthtech sector in Finland.
A pioneer in digital patient-monitoring that deploys artificial intelligence, Kaiku Health is firmly set on a fast growth track. In spring 2020, the company announced agreements with the large, global pharmaceutical corporations Roche and Amgen, and is meanwhile a secure family member of the new owner Elekta. Lauri Sippola says that Kaiku is currently recruiting more briskly than ever because Elekta is establishing its Center of Excellence for Patient Engagement and Artificial Intelligence in Finland. The number of Kaiku’s employees has now surpassed 50 people.
“This time the Swedes didn’t come to Finland to plunder. Elekta offers Kaiku better tools for succeeding globally, while also strengthening Finland’s healthtech ecosystem,” Joni Karsikas points out.
“Our future looks promising. As a part of Elekta, we have a truly global channel for offering our digital platform to the world. It’s really great to be involved in improving the care and treatment outcomes of cancer patients throughout the world – this is exactly what we’ve been aiming for,” comments Sippola.
An exit is always the result of careful consideration
The sale of the whole company to the world’s leading corporation in precision radiotherapy technology, Swedish Elekta, was not Kaiku’s only option. The owners were unanimous in deciding it was the best, though. Elekta also produces patient data systems for cancer hospitals, and Kaiku was already compatible with them. Kaiku’s platform is specifically developed for monitoring cancer patients.
“We planned the next financing round when we discovered one of our potential cooperation partners was willing to buy the company. We started in January, and the acquisition was announced in mid-May. Joni Karsikas played a decisive role in the negotiations. We worked together daily in getting the deal done,” says Sippola.
Karsikas believes the transaction is not simply a passing highlight of spring 2020, but rather one of the pinnacles of an investment director’s entire career. “It was extremely gratifying that there were numerous attractive options and we got to cherry pick from among them,” he smiles.
“The method for exiting is always the result of thorough analysis and careful consideration. The founders’ perspective, however, is paramount – the company lives and breathes along with them so what they want for the company is critically important,” stresses Karsikas.
Finland is an ideal country for a healthtech company
Sippola believes that Finland is an ideal country in which to build health technology and to found healthtech companies. There are at least two reasons for this:
“Finland has top-class research in oncology and other medical fields, added to which Finns have a long history of technological expertise. We not only have strong global growth stories in healthtech, such as Instrumentarium and Planmeca, but also a host of thriving startups. Financing is available – from Tesi and its partners, for instance,” he adds.
Karsikas calculates that there is a relatively high number of healthtech companies in Finland given the country’s small market size. Many companies are still in a rather early stage, but he believes some will find a fast track to growth and expand internationally.
“Healthtech is not such a key theme in, say, the other Nordic countries as it is in Finland. We are farther along in digitalising healthcare than our neighbours, who have a correspondingly long history in pharmaceuticals development,” he comments.
Business opportunities are global
Health technology is one of an impact investor’s favourite sectors – it’s difficult to find something more impactful to invest in than keeping people healthy and mitigating climate change. As Karsikas points out, other problems seem to take second place in comparison.
“Healthtech is an exciting sector also from the viewpoint of profitable returns. Since digitalisation of the sector started only recently, there is still room for technical innovations with revenue potential. The problems we face are global, so the business opportunities are also global,” he adds.
In Lauri Sippola’s opinion, an ageing population and rising healthcare costs have increased the pressure for a digital breakthrough in the health sector.
“The good news is that digital healthcare will enable better treatment for a larger number of people. Personalised care is a huge trend, and digital solutions help in selecting the correct and most effective right treatments,” he points out.
Photos: Junnu Lusa
Read more: Kaiku Health’s four steps to success
What it is: A software company established in 2012. Developed a digital platform for intelligent patient monitoring. Founders: Lauri Sippola, Joel Lehikoinen, Otto Seiskari, Henri Virtanen and Kaarlo Haikonen. Based in Helsinki.
Product: Kaiku Health’s platform is used in routine care by over 60 oncology clinics and hospitals in Europe. It is deployed in many university hospitals in Finland. Revenue model is Saas, Software as a Service.
Personnel: Some 50 employees.
Owners: Swedish listed company Elekta, global market leader in precision radiotherapy. 4,000 employees. Head Office in Stockholm.
Who he is: CEO and co-founder of Kaiku Health
Education: MSc in Industrial Engineering and Management, Aalto University.
Experience: 20th employee of REFLEX Solutions. In 2019, REFLEX raised €175m in funding from TCV, which has also invested in, for instance, Facebook.
Special: Included in MIT Technology Review’s Innovators under 35 Europe list. A keen football fan who plays in the 5th division.
Who he is: Investment Director in Tesi’s Venture Capital team since 2017. Responsible for investments in healthtech companies, in particular, and for developing current portfolio companies.
Education: MSc, BA (Lappeenranta University of Technology).
Experience: From 2011, project manager in KPMG’s Global Strategy Group, working with acquisition and growth strategy.
Special: Father to newly born Lukas and an enthusiastic football fan.