Healthcare IT / Digital Health VC Funding in 2016 Crosses $5 Billion for the First Time, Reports Mercom Capital Group

1/18/17

Mercom Capital Group, a global research and communications firm, released its annual report on funding and mergers and acquisition (M&A) activity for the Healthcare Information Technology (HIT) / Digital Health sector. Mercom's comprehensive report covers Healthcare IT deals of all sizes across the globe.

Full Report

Venture capital (VC) funding, including private equity and corporate VC, in the Healthcare IT totaled $5.1B (billion) in 622 deals in 2016, a new record for the sector. By comparison, $4.6B was raised in 2015 in 574 deals. Corporate funding in Health IT companies -- including debt and public market financing -- came to $5.6B, down 30 percent from 2015.
Healthcare IT VC Funding 2010-2016

Since 2010, the sector has received $18.5B in VC funding in 2,672 deals and ~$7.5B in debt and public market financing (including IPOs), bringing total Healthcare IT funding to $26B.

"Venture Capital funding bounced back after declining in 2015," commented Raj Prabhu, CEO and Co-founder of Mercom Capital Group. "Digital Health public companies on the other hand continue to struggle."

Healthcare IT VC Funding 2010-2016 by Technology

Consumer-centric companies raised ~$3.5B in 437 deals, up from $3.1B in 403 deals in 2015. Practice-centric companies raised more than $1.6B in 185 deals, up from the $1.5Braised in 171 deals in 2015.

Top Funded Health IT Technologies since 2010

Top funded areas in 2016: Mobile Apps-$1.3B, Wearable Sensors-$592M, Data Analytics-$574M, Telemedicine-$528M, Mobile Wireless-$228M, and Wellness-$218M.

Top Funded Health IT Technologies 2016

Top five VC funding rounds in 2016: Ping An Good Doctor-$500M, Chunyu Yisheng-$183M, Flatrion Health-$175M, Jawbone-$165M, and Meet You-$151M.

A record 1,115 investors (including accelerators/incubators) participated in Healthcare IT VC funding in 2016 compared to 923 in 2015. Top VC investors in 2016 were: Khosla Ventures (seven deals), then GE Ventures, Social Capital, and BlueCross BlueShield Venture Partners (six each).

Healthcare IT - Top VC Funding Rounds 2016

There were 83 accelerator and incubator deals in 2016, compared to 55 in 2015.

35 countries saw Healthcare IT VC funding deals in 2016 compared to 27 in 2015.

M&A transactions in Health IT dropped to 205 compared to 219 in 2015.

Mobile Health Apps saw the most M&A transactions in 2016 (21), then Data Analytics (19), Practice Management Solutions (16), and Telemedicine (12).

The top five disclosed M&A transactions in 2016: $2.75B acquisition of MedAssets by Pamplona Capital Management, $2.6B acquisition of Truven Health Analytics by IBM, $2.35B acquisition of Press Ganey Associates by EQT Equity fund EQT VII, $950M acquisition of Netsmart Technologies by Allscripts & GI Partners, and $820M acquisition of Verisk Analytics' healthcare services business from Verisk Health (Verscend) by Veritas Capital.

Top Healthcare IT - M&A Transactions in 2016

Debt and public market financing for Healthcare IT companies fell to $533Min 18 deals, compared to $3.4B in 29 deals in 2015. Four IPOs raised a combined $234M while seven IPOs in 2015 brought $2.2B. NantHealth raised $91M,Tabula Rasa HealthCare-$51.6M, Oneview Healthcare-$46.5M, and Senseonics-$45M.

Of the 30 digital health public companies we track, only eight companies beat the S&P 500..
Mercom's comprehensive report covers deals of all sizes across the globe.

Full Report

About Mercom Capital Group

Mercom Capital Group is a global communications and research firm focused on healthcare information technology, cleantech and financial communications. Mercom advises companies on new market entry, custom market intelligence and strategic decision-making. Visit: www.mercomcapital.com. To get our market intelligence reports, visit: www.mercomcapital.com/market_ intelligence.php.

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