Funding in Healthcare IT Companies hits $2.2 bn in 2019: Report

digital healthcare

Mercom Capital Group, a communication and research firm released its report on the VC funding in digital health where digital health companies stood at $2bn from 149 deals for the first quarter of 2019. Since 2010, digital health companies have raised $37 bn in VC funding.

This evaluates with $1.4 billion across 142 deals recorded during the sequential fourth quarter of 2018, according to a report by Mercom Capital Group.

The total corporate funding for digital health companies – including VC, debt and public market financing amounted to $2.2 billion in Q1, 2019, the report said.

“Funding levels were down compared to last year in digital health, in the absence of larger deals. M&A activity was also flat. However, digital health public equities experienced a turnaround in Q1 with 66 per cent of them beating the S&P 500, compared with Q4 2018 when 63 per cent of the equities we tracked performed below the S&P 500, said Raj Prabhu, CEO of Mercom Capital Group.

The favorable market conditions have prompted several companies to announce IPO plans, he added.

Top Funded Healthcare Categories in 2019 Amount un USD
mHealth apps $392 million
Telemedicine $220 million
Healthcare booking $177 million
Clinical decision support $107 million
Wireless mobiles $90 million
Healthcare IT service providers $80 million

There were 48 early-round deals in the first quarter. The top VC deals in Q1 included a $170-million investment raised by Doctolib, followed by Health Catalyst ($100 million), Calm ($88 million) and Taimei Medical Technology ($80 million).

Also read: Cigna to invest $250 mn in digital health

In the M&A activity, a total of 371 investors participated in funding deals in Q1 compared with 412 investors in the same quarter a year ago. Digital health VC funding deals were distributed across 17 countries in Q1 2019.

In Q1 2019, there were 45 M&A transactions (seven disclosed) involving companies in this sector compared with 48 M&A transactions (13 disclosed) in Q1 2018.

The top disclosed M&A transactions included the $195 million acquisition of Voalte by Hill-Rom Holdings, followed by BioTelemetry’s acquisition of Geneva Healthcare for $65 million.

Alphabet’s Google acquired Fossil Group’s intellectual property related to a smartwatch technology currently under development for $40 million, Netmeds acquisition of KiViHealth for $10 million and Livongo Health’s acquisition of myStrength for $10 million.

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