In the first quarter of 2013, venture capital firms have put 35 percent more funding into digital health companies than they did in 2012. And with a few big exits to kick off the year, there’s hope that more of them will start to see the M&A activity that they – and other wary investors – have been waiting for.
In the first quarter of the year that John Nosta deemed “The Year of Digital Health,” accelerator Rock Health counted 37 deals totaling $365 million (including only investments of more than $2 million in venture funding).
The biggest investments so far have gone to Health Catalyst, which raised a $41 million Series B to bring its data warehouse solutions to healthcare providers, and Audax Health, which raised $21 million as it works with Cigna to create a patient social networking tool for health insurers.
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Rock Health’s analysis noted that startups enabling remote patient monitoring were the runaway winners in terms of number of deals.
Among them, Intuitive Health Inc., partnered with AT&T on a wireless monitoring platform, raised $3.4 million. Meanwhile, Independa, a platform geared toward seniors, attracted $5 million and a new strategic partner in LG Electronics USA.
Investors may be putting money into digital health technologies, but as the sector matures, the question that’s going to be asked more and more is how much they’re going to get out of them. According to Rock Health, those exits are starting to come. Already 2013 has brought a few big acquisitions – from Allscripts’ $235 million buy of Israeli medical software company dbMotion to athenahealth’s $293 million acquisition of Epocrates and UnitedHealth Group’s purchase of Humedica.
“We’re hearing WellDoc will be the first major acquisition announced in Q2,” Halle Tecco wrote in Rock’s blog post today.
