Venture capital funding for health IT rebounds in Q3
- A new report from Mercom Capital Group says venture capital funding for health IT is back up, 32% quarter over quarter with $3.57 billion spent so far this year.
- The area with the largest growth derived from funding for technologies aimed at the public: companies focused on providers gathered $357 million in 42 deals, and consumer-focused companies gathered $1.2 billion in 106 deals this quarter (Q3).
- Additional report findings showed that rating, booking and comparison shopping companies had the best fundraising quarter since the company started tracking this category ($728 million in 15 deals), followed by mobile health companies ($319 million in 59 deals), personal health and wellness ($114 million in 17 deals).
Mercom Capital CEO, Raj Prabhu, said in a statement, "Consumer-focused health IT companies have continued to grab a larger portion of VC funding, but have consistently lagged practice-focused companies in M&A activity. This quarter, however, M&A activity increased with 18-consumer focused transaction, the highest number in a single quarter for these companies. It's a very positive trend if it continues because IPOs have not proven to be a sure path to success for the sector."
Practice management companies raised $72 million in 5 deals, telehealth $65 million in 14 deals, and data analytics scored $61 million in 14 deals.
The largest M&A was IBM's acquisition of Merge Healthcare for $1 billion, followed by Emdeon's $910 million acquisition of Altegra Health.
Guahao, an online portal for patients in China, was the top VC deal this quarter with $394 million raised. Next, ZocDoc, an online booking platform, raised $130 million, followed by Practo, a physician search engine to book appointments and rate providers, which raised $90 million.
- Healthcare IT News Health IT VC 'back on track' after dip