Digital health sector receives $20 billion in VC funding since 2010
Mercom Capital Group, a global communications and research firm, released its report on funding and mergers and acquisitions (M&A) activity for the Healthcare Information Technology (IT) / Digital Health sector for the first quarter of 2017. Mercom’s comprehensive report covers deals of all sizes from across the globe.
Venture capital (VC) funding, including private equity and corporate venture capital, in the Health IT sector almost doubled quarter-over-quarter (QoQ), coming in at $1.6 billion in 165 deals compared to $845 million in 159 deals in Q4 2016. VC funding in Q1 2017 was also up compared to Q1 2016 when nearly $1.4 billion was raised in 146 deals. The digital health sector has now received $20 billion in VC funding since 2010.
Total corporate funding in Health IT companies – including VC, debt and public market financing came to $1.8 billion compared to $1 billion in Q4 2016.
Since 2010, VC funding in the Healthcare IT sector has now crossed $20 billion (2010 – Q1 2017).
“Digital Health funding is off to a fast start this year and there was no visible ‘Trump effect’ on investments in the sector, at least in the first quarter, and publicly-traded Digital Health companies actually fared much better in Q1 than last year,” commented Raj Prabhu, CEO and Co-Founder, Mercom Capital Group.
Healthcare practice-centric companies received 35 per cent of the funding in Q1 2017, raising $574 million in 50 deals compared to $261 million in 42 deals in Q4 2016. Consumer-centric companies received 65 per cent of the funding this quarter, bringing in $1 billion in 115 deals compared to $584 million in 117 deals in Q4 2016.
The top funded areas in Q1 2017 were: appointment booking $315 million, mobile wireless $230 million, data analytics $193 million, population health management $115 million, telemedicine $112 million and social health network $102 million.
There were 65 early round deals, including 14 accelerator and incubator deals.
The top VC deals this quarter included: $200 million raised by Hudong Feng Technology (Haodaifu), $115 million raised by Alignment Healthcare, $100 million raised by PatientsLikeMe, $90 million raised by Nuna, and $85 million raised by PointClickCare.
A total of 306 investors (including four accelerators/incubators) participated in funding deals in Q1 2017 compared to 340 investors in Q4 2016, of which two were accelerators/incubators.
Health IT VC funding deals were spread across 19 countries in Q1 2017.
There were 49 M&A transactions (seven disclosed) in the Healthcare IT sector in Q1 2017 compared to 42 transactions (11 disclosed) in Q4 2016.
Practice Management Solutions companies were involved in the most M&A transactions with six, followed by apps and data analytics with five each, then consulting and telemedicine with four apiece.
The top disclosed M&A transactions were: $1.1 billion acquisition of CoverMyMeds by McKesson, Eliza Corporation’s $170 million acquisition from Parthenon Capital Partners by HMS Holdings, Jiff’s $134 million buy of Castlight Health, and HCI Group for $110 million by Tech Mahindra.
There were a total of 573 companies and investors covered in this report.