Health IT funding robust in 2017 Q1

Dive Brief:

  • Venture capital funding for health IT in the first quarter of 2017 totaled $1.6 billion in 165 deals, nearly double the $845 million across 159 deals in the 2016 fourth quarter, Mercom Capital Group reports. The quarter also beat Q1 2016, when 146 deals raised $1.4 billion.
  • Total funding for digital health — including venture capital, debt and public market financing — was $1.8 billion, up from $1 billion in the final quarter of 2016.
  • Consumer-focused companies received 65% of the funding, raising $1 billion in 115 deals, leaving the rest for healthcare practice-centric companies, with $574 million across 50 deals.

Dive Insight:

Leading the deals this quarter was appointment booking platform developer Hudong Feng Technology, with $200 million. Other top deals included Alignment Healthcare at $115 million, patientslikeme at $100 million, Nuna at $90 million and PointClickCare at $85 million.

The top-drawing categories were:

  • Healthcare appointment booking – $315 million
  • Mobile/wireless – $230 million
  • Data analytics – $193 million
  • Population health management – $115 million
  • Telemedicine – $112 million
  • Social health network – $102 million

“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, Raj Prabhu, CEO and cofounder of Mercom Capital Group, said in a statement.

The report follows upbeat first quarter reports on digital health funding by StartUp Health and Rock Health earlier his month.

StartUp Health tracked 124 deals totaling $2.5 billion. Rock Health reported just over $1 billion spread across 71 deals. Both agreed it was a strong quarter. However, StartUp Health called it an all-time high for digital startup funding while Rock Health put investments ahead of 2016 but behind 2015.

The reports are overall good news for an industry that has been keeping a watchful eye on the White House. There was worry that the President Donald Trump's administration's focus on changing the Affordable Care Act would create enough uncertainty to lower investments and create a risk-averse climate. “That’s certainly a concern as we fund these fragile new startups that have an appetite for financing that’s based upon risk,” Frank Moss, co-founder and chairman of Twine Health, told Healthcare Dive in December. “It may not be easy for awhile.”

Filed Under: Health IT Finance
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