It was a recordbreaking year for digital health dealflow in 2014. Healthcare industry consolidation coupled with maturing digital health companies means that 2015 could outpace last year for exits.
CB Insights offered up a useful breakdown on digital health exits over the past five years. Fitbit and Veeva are standouts and account for a handful of unicorns on the list. Fitbit’s wearables business has been the only digital health IPO this year. With a $4.1 billion valuation in the second quarter, its stock price has continued to rise and as of yesterday its market cap was $8 billion.
The only company that beats Fitbit is Veeva, a business to business Software as a Service for the life science industry that went public in 2012. Veeva is also notable because it required the least amount of capital investment. The $4 million in funding it secured in the road to its IPO is a pittance in the digital health universe and maybe a good argument for exclusion from this list since it is such an outlier.
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Castlight Health has underpeformed on the stock market since it went public last year. The company, which helps employers manage healthcare costs, has become much more diverse than the price transparency tools that gave the business profile from collaborations with Teladoc to its investment in Lyra Health, w.
There were four IPOs in 2014, the pace has slackened a bit this year. Teladoc and Evolent Health went public over the summer. Although there’s been speculation over who might be next, with ZocDoc and Proteus Digital Health seeming like the best prospect, it remains an open question. M&A deals could outpace 2014, especially considering the interest medical device companies and, to a lesser extent, pharma companies have in the value of digital health businesses to add services to support their products. Add to that businesses seeking to move into digital health and digital health companies that want to grow by acquisition, these factors should boost exits this year.
