Health IT, Startups

Rock Health: 16% of digital health companies funded in Q3 2017 led by women

Among the digital health trends in the third quarter highlighted in Rock Health's report: More companies led by women secured investment than in first half and consolidation slowed.

A digital health report from Rock Health showed that women-led companies and geographic diversity continued to build in the third quarter. In the three months through September 30, of the 84 companies that raised $1.2 billion, 16 percent were led by women.

Women-led companies that received investment in the third quarter reflect a wide range of digital health subsectors. Although women’s health is among them, it is one of several. Other include care coordination with Chicago-based ExplORer Surgical, cofounded and led by CEO Jennifer Fried. The business raised $3 million to advance its operating room care coordination and analytics business. Genetic screening business  23andMe raised $250 million under the leadership of Anne Wojcicki in what is widely seen as an expansion into the world of drug development. Medical transport startup Circulation, cofounded and led by Robin Heffernan, raised $10.5 million.

Tia, a women’s healthcare startup geared to millennials raised $2.5 million and was one of seven women’s health startups to receive funding for the year to date. Others included Babyscripts, Lucy, Carrot, Progyny, Maven and Flo, the report noted.

On the merger and acquisition front, the consolidation has slowed with only 83 M&A deals to date. One emerging trend is that clinical workflow companies have been the most popular with nine acquisitions for the year to date.

It’s the 10th month of the year and so far, not one hint of a digital health initial public offering. It could be that the market is a bit constipated between overvalued businesses and companies that just haven’t proven their worth yet, or don’t feel like being the canary in the 2017 coal mine.

There is one exception, however. Henrik Molin, the CEO of Physitrack, a Swedish telerehab business, recently said the digital health company would soon file for an IPO…on Nasdaq First North in 2018.  The company claims to have 1.1 million patients in 102 countries.

In a phone interview, Molin said it is more welcoming of earlier stage healthcare startups than the American exchanges.  In the U.S, commenting on the digital health scene, he noted that there’s too much money flying around and it’s hampering a lot of businesses.

Commenting on his plans to go public on Nasdaq First North, Molin said:

“I see it as a great route to us establishing ourselves as a bigger player.”

Photo: SergeyNivens. Getty Images 

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