The amount of investment dollars pumped into red-hot digital health startups continued to inch up in the first half of 2013, but not quite as dramatically as it has over the past two years.
Rock Health’s mid-year report on digital health deals reveals that in the first six months of this year, 90 companies raised $849 million, compared to 68 companies raising $675 million in the first half of 2012. That’s a 12 percent uptick in investment dollars compared to the first half of 2012, when year-over-year growth compared to the first half of 2011 was 120 percent. Note, though, that 2011 was the first year Rock Health collected data, so it’s hard to pinpoint definite trends just yet.
Although there have been more deals in 2013, the biggest of them don’t quite size up to the biggest deals in the first half of last year. Take a look at the top 5 deals of the first half of 2013:
- Proteus Digital Health $45M
- Health Catalyst $41M
- Watermark Medical $32M
- Nant Health $31M
- HealthTap, $24M
Now look at the biggest deals from the first half of 2012:
- Castlight Health, $100 million
- GoHealth, $50 million
- Kinnser Software, $39.9 million
- AirStrip Technologies, $39 million
- Valence Health, $30 million
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
The report’s authors note there’s been less dabbling and more commitment on behalf of investors, with a 25 percent jump in the number of deals year-over-year. Four investors made three or more investments. Social+Capital Partnership led the way with five deals (including Asthmapolis and Syapse Inc.), followed closely by Norwest Venture Partners, which contributed to rounds for iRhythm and three other companies. Interestingly, neither of those firms was among the top digital health investors in 2012, as per Rock Health’s year-end report from last year.
Keep in mind that the report only analyzed data from rounds of $2 million or more, as reported by Capital IQ, the SEC, company websites, CrunchBase, NVCA and the Rock Health funding database.
There were no surprises among the themes that emerged in those deals: Remote patient monitoring, analytics and big data, electronic health records, wellness, and personal health tools and tracking.
Check out the full report below for more insights.
