The Role of Digital Investment Literacy Index (DILI): Exploring the Case of Smart Health Investment
Health investments are increasingly being approached with a hint of innovation. Advanced solutions continue to draw investor interest, yet many of them still miss to consider the importance of detecting digital signals, even though these directly influence valuation and adoption potential. This article illustrates how the Digital Investment Literacy Index (DILI) can help assess an investor’s ability to recognise, interpret, and strategically leverage these digital signals in modern dealmaking.
Kinga Forró
Digital Business Analyst
On the target: The state of smart clothing
Observing today’s businesses, digital is the common thread linking companies. Being fluent in its language and the signals it conveys provides a clear advantage.
Digital technologies are increasingly embedded across industries, fostering new forms of collaboration and bridging diverse areas of expertise. The smart clothing market represents an emerging sector that sits at the intersection of healthcare, sports science, fashion, and digital innovation. It elevates apparel beyond its traditional role, enabling biometric insights, environmental responsiveness, and real-time health monitoring. Industry estimates project the smart clothing market to grow at a 25.6% CAGR between 2025 and 2030, highlighting the accelerating adoption of these solutions.
Smart clothes are turning everyday items into much more. And the idea that technology can add a new dimension to something we use daily, even contributing to our health, sounds compelling and future-ready. In practice, several brands are bringing this concept to life. Hexoskin, for example, integrates textile sensors into garments to monitor heart rate, breathing patterns, and physical activity. Or there is Skiin by Myant, which offers everyday apparel with embedded biometric sensors, enabling 24/7 monitoring of sleep, movement, and other vital signs. Meanwhile, Sensoria focuses on smart socks and shirts designed to support rehabilitation and performance optimisation, using real-time data to guide exercise and prevent injuries.
These examples illustrate that value creation increasingly relies not only on the physical product but also on the strengths and reliability of the surrounding digital ecosystem. The potential arises from the combination of textiles and digital platforms. Smart garments and wearables continuously collect data, run advanced analytics, and interpret signals algorithmically, helping users understand their own health signals. This means that stable connectivity, platform compatibility, regular software updates, and secure data storage are essential. Given that these products handle sensitive biometric information, users also rely on these platforms to keep their data safe and private.
Healthcare investors typically focus more on clinical validation, patient demand and market expansion potential when making decisions, while the digital dimension often remains underexplored. Yet digital signals can be early indicators of market readiness, user trust, and behavioural intent. Beyond the technological aspects, these include digital brand reputation within patient communities, the growth of symptom-tracking or health-optimising search behaviours, sentiment trends, or engagement patterns across social platforms.
The Digital Investment Literacy Index (DILI) addresses this gap as an educational benchmark designed to assess investors’ ability to identify, interpret, and act on digital signals, providing a structured measure of digital intelligence. The Healthcare and MedTech industry is particularly exposed to digital risk, where insufficient digital due diligence can significantly increase investment vulnerability. Strengthening digital investment literacy equips investors to evaluate both the product and its surrounding digital ecosystem that shapes the deal's success.
To illustrate, let’s explore the case of a smart clothing startup.
Case study: The digital investment literacy gap
In the present case, a $120M digital health fund is interested in early-stage intelligent clothing startups.
The fund is evaluating startups that range from vital sign monitoring to intelligent textiles that track mobility or support rehabilitation. Among the companies under evaluation, several demonstrate strong early traction, with projected 2025 revenues of $50 million and growing communities of engaged users and healthcare professionals.
The Senior Partner responsible for the US fund recently met with DILI to complete and test the platform. While it initially seemed time-consuming, the process was completed in just 20 minutes. Despite promising financial modelling and clinical insight, the Senior Partner’s DILI score revealed limited awareness of digital signals that could impact growth. However, the structured workflow of DILI helped to uncover several valuable insights, understanding how to approach digital data and analytics to inform investment decisions.
The revealed digital signals highlighted the target company’s strengths, providing guidance on which areas could be leveraged post-acquisition. For example:
Comparing industry-level data with the target company’s data can reveal areas of strength. For instance, web traffic analysis can indicate market interest and growth potential. To explore this, they decided to audit the historical web traffic, compare it with the industry average, and check the key drivers behind the traffic.
Online activity can serve as an indicator of real-world demand, such as engagement in online patient communities, adoption rates of smart garments, and the growth of health-related search queries. For instance, they examined forum discussions and social media content dedicated to smart health solutions, tracked monthly search volumes for terms like ‘smart shirt’ or ‘biometric tracking garments’. This approach allowed them to identify which product features drive the most digital interest.
Suboptimal integration of technological tools can create operational gaps, including challenges with AI-driven analytics, IoT connectivity, and platform compatibility. After testing the startup’s prototypes, the team noticed delays in syncing data from the garment to the analytics platform, caused by incompatible firmware versions across devices.
Digital KPIs, online brand sentiment, and digital reputation are strong indicators of adoption. For example, they analysed how users interacted with the linked application, tracking metrics such as daily active users and session length, while also monitoring online reviews to assess brand sentiment. This revealed that consistent reminders and positive community feedback are crucial for building trust and establishing habitual use, directly influencing overall adoption rates.
Conclusion
By applying DILI, the fund gained a systematic understanding of where their digital awareness is strong and where it requires development. The assessment highlighted areas of confidence but also exposed gaps, revealing the overlooked or undervalued aspects. This gap helped the fund understand why two previous portfolio companies underperformed despite strong clinical evidence.
The investors began applying a digital angle in their due diligence, increasingly monitoring a range of digital signals to sharpen both the discovery phase and target company evaluation. This is an ongoing process, with several startups currently under close review, providing the team with more precise insights into potential adoption and market traction. As digital signals become embedded in the fund’s evaluation process, future investment decisions are expected to better reflect real-world adoption rather than financial assumptions alone. The story will continue as the fund evaluates upcoming investment rounds.
Journey further to explore the Digital Investment Literacy Index (DILI) and take the assessment today. While DILI serves as a practical starting point for understanding digital risks and opportunities, a full Digital Due Diligence (DDD) provides more comprehensive insights into both potential risks and growth potential. Explore our dedicated landing page for curated insights or additional resources.
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