The year isn’t even over yet, but venture fund Rock Health is reporting that venture investment in digital health has equaled 2014’s record of $4.3 billion. Digital health continues to account for about 7 percent of all venture funding, the San Francisco-based organization said.
“While skeptics may use the flatness of growth to question the attractiveness of the digital health industry, it’s important to keep in perspective what an incredible feat it was for 2015 to be on track with record-breaking 2014,” Rock Health said in its year-in-review, released Monday. “The steady amount of funding should calm any concerns of a bubble.”
Last year, digital health investment doubled, according to Rock Health. Even with no growth in 2015, the sector has expanded an average of 30 percent annually since 2011, when investment totaled just $1.1 billion.
The $4.3 billion figure only includes U.S. deals worth at least $2 million. Even so, Rock Health counted 278 VC investments this large, involving 247 companies and averaging a record $15.6 million apiece. There were 294 venture investments in digital health companies last year, at an average of $14.7 million each.
The numbers are current through Dec. 8, a Rock Health spokeswoman said. Rock Health will issue revised, final data for 2015 on Jan. 11.
NantHealth was largely responsible for pulling the average up. The digital health portion of Patrick Soon-Shiong’s health-tech empire pulled in $680 million in new investment this year, topped by a $200 million cash infusion in June from electronic health records vendor Allscripts Healthcare Solutions.
ZocDoc, 23andMe and startup Helix also had investment rounds worth at least $100 million in 2015, according to Rock Health.
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.
2015 saw more later-stage investments than in past years, according to the venture fund. While more deals were for seed or Series A rounds, a quarter of all VC investment in digital health went to Series C or later rounds.
Images: Rock Health, Flickr user AMagill
