Health IT, Startups

CB Insights: What can we learn from 5 years of digital health investment?

CB Insights blog entry looking at the past five years of digital health gives a big picture glimpse of the pace, size and stage of investments.

As summer winds down, it’s worth thinking about how much activity there’s been in digital health over the past few months. The sector has refused to take a holiday. This week alone saw at least three acquisitions including Diabetes Guru, VerbalCare and naviHealth — although technically Cardinal Health has taken a majority stake in the business it fully intends to acquire the rest of it. The pace shows no signs of slowing. Welcome to the maturing digital health market.

CB Insights blog entry looking at the past five years of digital health gives a big picture glimpse of the pace, size and stage of investments. Even if we already know that 2014 marked a milestone with $1 billion invested in digital health in one quarter, seeing that spike after a few years of investment activity is a bit like admiring the scenery until you realize you are looking at the foothills of the Alps.

Three quarters of the past six have seen $1 billion invested in digital health companies. The majority of the splashy investments have been with a handful of companies such as startup insurance company Oscar Health data mining Intermountain Healthcare spin-off Health Catalyst and CB Insights helpfully highlights these companies. Jawbone tops the list but if it weren’t for $393 million in debt it probably wouldn’t bet at the top of the list. HeartFlow and Proteus Digital Health are the convergence standouts — digital health meets medical device company. ACO technology helpers Privia Health and Lumeris are there as well.

The list of the most active early stage investors is interesting. Since it has changed from an accelerator model to an investment fund Rock Health has been aggressively investing in digital health startups, but I have to admit I would not have thought of them as topping the list. I was also a bit surprised by First Round Capital. A few years ago it maybe had a couple of health tech companies in its portfolio. Now it’s more like nine, including one of the most well funded — Flatiron Health.

Here is the top 10:

  1. Rock Health
  2. 500 Startups
  3. Khosla Ventures
  4. SV Angel
  5. Andreessen Horowitz
  6. The Social+Capital Partnership
  7. Founders Fund
  8. First Round Capital
  9. CRV
  10. General Catalyst Partners

Photos: CB Insights

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