Last year investments in big data dominated health IT deals as 112 deals attracted $712 million in investments, according to a new report by StartUp Health assessing digital health investment trends in 2013 and the start of this year. But in a trend that’s likely to continue this year, sectors that saw the most growth tended to fall into one of two areas. Patient engagement had a 410 percent boost in deal flow, followed by sensors and vital-sign monitoring which showed a 243 percent rise.
Although the number of deals in the first quarter has declined to 133 compared with the same period in 2013, deal size has more than doubled to $1.35 billion compared with $599 million last year.
The largest deals of the first quarter give some clues on some areas of interest, and help give a sense of investment priorities:
Heart Flow raised $105 million. It’s a noninvasive diagnosis of coronary artery disease. It gives medical professionals a useful way to diagnose the disease using CT scans and proprietary computer algorithms that are based on computational fluid dynamics, according to the website. It could also potentially increase patients’ understanding of their health.
Medhok, a Software as a Service tool with an integrated, cloud-based platform, raised $77.5 million. It supports Rx and Medical care for health plans, pharmacy benefit managers, accountable care organizations and hospitals.
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.
Dedalus, a practice management software vendor, raised $89 million.
Human Longevity, Inc raised $50 million toward building a human genotype, microbiome and phenotype database with an eye to licensing access to it for the development of new diagnostics and therapeutics.
MedFusion raised $61 million for its laboratory and clinical trial services provided to healthcare and pharmaceutical companies.
Who were the biggest sources of digital health investment last year? Andreessen Horowitz and Khosla Ventures each invested in nine companies — more than any other venture firms. They were followed by General Catalyst Partners and Norwest Venture Partners with seven investments apiece and Kleiner Perkins Caulfield Byers and Maverick Capital who backed six digital health companies last year.
Here are three of the most interesting slides from the deck.
