Investors may have pumped 45 percent more money into digital health companies in 2012 than they did in 2011, but new data shows most of them are either still apprehensive or haven’t yet found the kind of deals they’re looking for.
Digital health companies raised $1.4 billion in 2012 compared to $968 million in 2011. But, more than 20 percent of that was raised in conjunction with the five biggest deals of the year (for Castlight Health, GoHealth, Care.com, 23andMe and Best Doctors).
Nearly 180 organizations invested in digital health companies in 2012. But, most of them did single deals. Only eight invested in three or more companies. Interestingly, the top investors by number of deals are an even mix of venture capital firms and strategic investors.
- Qualcomm Ventures (investments included app maker AirStrip Technologies, mobile heart monitor company AliveCor and connected glucose meter maker Telcare)
- Aberdare Ventures (investments included goBalto, maker of cloud-based tools for clinical trials, and medication adherence firm RxAnte)
- Merck Global Health Innovation Fund (investments included Healthsense, provider of aging services technology)
- NEA (investments included genetic testing company 23andMe and Care.com)
- West Health Investment Fund (investments included goBalto, RxAnte and cost transparency company Change Healthcare)
- BlueCross BlueShield Venture Partners (investments included Change Healthcare and health rewards platform EveryMove)
- Council Capital (investments included pharmacy services company NuScriptRx)
- Khosla Ventures (investments included AliveCor, Ginger.io and Mistfit Wearables)
According to Rock’s calculations, 134 digital companies each brought in more than $2 million. Among them, four themes emerged. Most prevalent among companies receiving funding were those focused on health consumer engagement, the report noted, followed by personal health tracking and tools, EMR/EHR companies and tools for hospital administration.
Unsurprisingly, Boston and the San Francisco Bay Area led the way in investments. Other places with five or more deals in 2012 included Washington state, Texas, Tennessee, Florida and Illinois.
[Graph from Rock Health 2012 Digital Health Funding Report]