The Competition „Scratches Their Heads” – What Sets Polish MedTech Companies Apart

I invite you to read the second part of the conversation with Aleksander Kłósek from the Venture Capital fund YouNick Mint. This time, the expert shared what makes Polish start-ups stand out on the international scene and what factors influence investors’ decisions.

YouNick Mint is one of the few Polish funds that invests in MedTech and BioTech companies, where regulations add an extra layer of risk. How do you approach this?

In MedTech companies, in addition to the numerous risks related to business, market, technology, and the founding team (common in most early-stage projects), there is another critical factor: regulatory risk. The procedures in this area are well-defined by both national and international regulatory bodies, such as the European Medicines Agency (EMA) and the U.S. Food and Drug Administration (FDA). Since this sector only began to develop in Poland after the political transformation, there is a shortage of specialists with expertise in this area, often necessitating support from international experts. When these experts are external advisors rather than part of the team, the cost of involving them in the project can be very high. The option of case-by-case engagement is often insufficient for effective goal realization within the organization. Therefore, all regulatory actions must be planned from the very beginning. The company should anticipate at what stage of development it will need additional expertise, where to find it, and how much funding will be required for this purpose.

Do you support start-ups in finding regulatory specialists?

Yes, we both raise awareness of these issues among start-ups and assist them in finding the right specialists. We encourage entrepreneurs to identify gaps in competencies, both in technology and regulation. A „gap analysis” is especially important to „know what you don’t know” and what might become a challenge so that it can be addressed in advance. It is crucial to ensure that these aspects do not hinder the further development of the venture.

What operational support do you offer to start-ups?

We engage in various aspects, from corporate and legal support to HR areas, to finding partners and advisors in different parts of the project. We use our experience to provide solutions and support entrepreneurs in making strategic decisions. Based on our many years of experience, we can often suggest certain solutions that have worked in similar circumstances. However, the role of the team in decision-making is always crucial. An „all-knowing” investor rarely contributes positively to a company – it is the management and founders, not the fund’s representative, who should know the most about the business and have a vision for its future. From a start-up’s perspective, the most important thing is that the investor does not interfere with business operations (laughs) while offering support where it is needed.

What is the significance of public support for the development of MedTech and HealthTech start-ups in Poland?

We are currently at a point where medical projects are highly demanding and time-consuming to implement. As a result, many investors prefer to invest in areas such as IT or marketplaces, which, in their early stages, still carry high business risk but are not affected by a complex regulatory environment. Therefore, to encourage private capital by limiting risk, public sector support for innovative ventures is crucial. In other regions of the world, both in Europe and the United States, public support is well-developed. Various grants and other initiatives backed by government institutions or NGOs support technology development. Currently, there is a funding gap in Poland, especially for early-stage companies. Programs like Bridge Alfa, which ran from 2016 to 2023, helped finance many innovative pre-seed/early-stage projects. However, obtaining financing for innovative companies is now more challenging. Nonetheless, it is worth noting that market-attractive ventures, led by experienced and determined founders, can effectively attract capital from private investors – either funds or business angels.

What sets Polish start-ups apart from foreign competitors?

I believe a significant factor is the difference in access to capital, especially compared to medical or biotech companies in the United States and Western Europe. The BioTech and MedTech industries are very capital-intensive. However, the need to manage more modest resources makes Polish start-ups more cost-effective and resourceful in finding solutions. Large international companies often „scratch their heads” when they see the results achieved by Polish companies with relatively low investments. Another advantage is the still lower labor costs in Poland, which applies to both hiring highly qualified specialists and, for example, conducting clinical trials. The skills and capabilities of Polish researchers in conducting clinical trials are very high, and the experience of research centers matches the best in the world.

What are the opportunities and challenges for MedTech and HealthTech start-ups?

A massive growth driver at the macro level is an aging population and rising incomes in societies, which translates into greater possibilities and higher expectations for quality healthcare. The COVID-19 pandemic has further underscored the importance of health. One of the main challenges is the shortage of healthcare professionals, making technologies that streamline their work (from relatively simple solutions that enhance administration to advanced AI-based diagnostic support systems) „worth their weight in gold,” alongside the development of new therapies, drugs, and vaccines. The implementation of innovation can significantly improve the availability of services and the quality of treatment, meeting the growing needs of an aging global population.

I also heartily encourage you to read the first part of the interview: When Team Competence Matters More Than the Idea: What MedTechs Do Investors Choose?

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Stay tuned for more in the “Health Tech of the Week” series, where we’ll continue to uncover fascinating stories from the world of medical technologies that are changing the face of healthcare. If you’re working on an innovative project in the field of new technologies and medicine or want to recommend an interesting solution, contact us at: [email protected].