Rock Health’s latest report found $986 million was invested across 61 digital health deals in the first quarter of 2019. By comparison, that’s a little more than half of the $1.6 billion raised in Q1 2018. It’s also at about the same level as Q1 2017 funding and 31 percent below the funding secured in Q1 2016, according to Rock Health.
A few top amounts secured in the first three months of 2019 include an $88 million round for Calm, which makes a meditation app, and a $100 million round for Health Catalyst, a data analytics company. Both Calm and Health Catalyst reached unicorn status — a $1 billion valuation — with those fundraises.
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Rock Health found that during Q1 of this year, about 25 percent of deal flow focused on care coordination and disease monitoring. “This focus appears to be, at least in part, a response to improved reimbursement for digital solutions, specifically remote patient monitoring (RPM) and chronic care management (CCM),” the report notes.
Meanwhile, Rock Health also examined the potential end of the IPO drought. The last IPO involving a U.S. digital health company — iRhythm, a wearable heart monitor company — happened in 2016, according to the report. But another IPO may be on the horizon. This year, Livongo, Health Catalyst, Change Healthcare and Peloton were each reported to have IPO plans.
As for digital health M&A action, Q1 saw 21 startup acquisitions, compared to an average of 31 acquisitions per quarter across 2016 to 2018. The report notes that behavioral health was a hot area. For instance, earlier this year, chronic disease management company Livongo bought myStrength, which offers resources and therapies to address conditions like depression, anxiety, insomnia and stress. And in March, AbleTo, a provider of tech-enabled behavioral health solutions, acquired Joyable, a San Francisco company offering app-based digital therapy.
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