Most partnerships between corporates and startups continue to fail, why?

The new R2G global survey reveals a slide increase in successful partnerships between corporates and startups in 2024. Still, most partnerships fail.

Partnerships have become one of the main drivers for innovation and growth in the digital health market. Around 95% of companies in the healthtech market (corporates or startups alike) have either formed partnerships or have plans to pursue them.

This is the result of a survey conducted by Research2Guidance in October 2024 among 812 digital health decision-makers on partnerships between corporates and startups worldwide.

It seems as if everyone in the global healthtech industry is entering into or wants to enter partnerships. But why, when most of them fail?

Only 15% of partnerships between healthcare corporates and startups are successful.

The success rate has not improved much over the last few years. It has only increased from 13% to 15% in the last five years.

The situation is somewhat better for corporates. It seems that their most important expectations of partnerships with startups (access to new technologies and patient data, gain from new business models) have been met.

On the other hand, only a very small proportion of the startups surveyed see that their most important expectations (increase in sales, funding, and access to distribution channels) have been met.

Why is that so? The participants in the study provide detailed information about this. In summary, it can be said that the partnerships are often not operated as such.

A lot of energy and time is invested in the search (planning and scouting), the selection (due diligence) and the contract design, but after that it doesn’t continue like that.

“We invest a large part of our resources in seeking partnerships. When we enter into one, we don’t treat our partner accordingly.” Survey participant from a pharmaceutical company.

After the first press statements, resources are often reduced on both sides, project managers on the corporate side change jobs, follow-up budgets are reduced or cut entirely, etc.

The proven project management tools such as joint strategy workshops or job rotation are used in less than half of the partnerships.

“We often enter a partnership with a pharmaceutical company or hospital too naively, exhausted after months of presentations and negotiations, and would rather rush into the next partnership hunt than say, “Okay, let’s make this work.” Startup participants.

The study also shows which levers are seen to improve the success rate of partnerships.

One trend that is emerging is that companies are increasingly switching to other partnership models such as client venturing or simply to a normal commercial client/contractor relationship. This trend is likely to continue in the coming years as healthtech companies mature.

Another important lever is seen in resource allocation. Fewer resources in scouting and more in the phases of piloting and upscaling, which are much more crucial for success. This lever is seen for both sides, but more for corporates.

For more information, download the white paper or buy the detailed report.

Thanks to all survey participants.