- A total of $6.4 billion has been invested in digital health ventures through the first three quarters of 2016 and $2.37 billion was invested in the third quarter alone, according to the StartUp Health Insights Digital Health Funding Rankings report.
- The patient/consumer experience subsector has received the bulk of these investments at $2.53 billion. The wellness subsector has received $918 million in investments and the personalized health subsector has received $634 million.
- San Francisco has been the most active with more than 79 investment deals totaling $1.2 billion. New York City was second with 46 deals totaling $868 million and Boston was third with 17 deals totaling $704 million.
Investments in digital health should surpass totals in previous years. Digital health investments grew slightly from $1.1 billion in 2010 to $2.9 billion in 2013 before leaping to $7.1 billion in 2014. Investments in 2016, at $6.5 billion, have already surpassed the 2015 total of $6.1 billion.
Two record-breaking, late-stage investment deals have already occurred this year. Ping An Good Doctor, which focuses on bringing medical services to Chinese populations via mobile, and Onduo, which is developing data-centric diabetes management software, each received $500 million investment deals. The two $500 million deals helped make the patient/consumer experience subsector the most active, although it would have remained the top funded subsector even without the $1 million.
The San Francisco Bay area and the Northeast have been the most active regions. More than one-third of 2016 digital health investment deals have driven 42% of all investments to these areas. However, the number of deals increased in places like Minnesota, Tennessee, and Florida.
More than 500 unique investors participated in digital health investment deals this year with more than 140 of them participating in multiple deals. Activity in the patient/consumer experience indicates that much of the interest is in developing patient-facing tools to help them access provider services or to manage health conditions.
Based on the data, report authors concluded that the digital health sector is in an early wave of innovation with few success stories. However, breakouts should be expected as markets mature.