In 2017, digital health funding broke records and, if the first quarter of this year is any indication, 2018 is set to continue the trend. It’s clear that digital health has moved from being a buzzword to being the focus of investment activity. A trio of recent reports highlights the attention and funds digital health companies are garnering this year.
Mercom reports $2.5B in digital health funding
Mercom Capital provides research, consulting, and communications in the healthcare industry, and their first quarter of 2018 report reveals there were $2.5 billion in digital health deals. About $936 million of that total came from just five deals, meaning that more than one-third were the result of what analysts are calling megadeals.
- The five companies included:
- Heartflow, which raised $240 million
- Helix, at $200 million
- SomaLogic, $200 million
- PointClickCare, $146 million
- Collective Health $110 million
Rock Health reports $1.62B in digital health funding
Rock Health provides fundraising, planning, customer and business development, and communications services, among others, to their clients. They issued a report regarding Q1 funding in digital health as well. Given the fuzzy nature of the definition of digital health, it’s no surprise that different companies measure different things and come up with different numbers. Rock Health reports $1.62 billion in digital health deals for 2018.
The same five megadeals are listed in Rock Health’s report, along with a list of the top six funded value propositions, and the companies that got the most funding in each category:
- Diagnosis of the disease, Heartflow
- Monitoring of the disease, Bigfoot
- Consumer health information, Helix
- Research and development, DNAnexus
- On-demand healthcare services, American Well
- Health benefits administration, Collective Health
Startup Health reports $2.8B in digital health funding
A third report, from Startup Health has the total deal volume for Q1 2018 at $2.8 billion across 191 deals. They list five takeaways based on their data:
- Funding is not slowing down
- The digital health market is maturing and growing
- Solutions for providers attract the most money
- Israel and China are driving international growth
- There is a robust investor ecosystem surrounding digital health
The Rock Health report also examines what kinds of technologies were receiving the most funding. In spite of all the recent chatter about AI, web applications and genetic sequencing technologies topped the list. Providers and patients were the top two end users, and most of the digital health companies that were funded in the first quarter were agnostic as far as specialty area.
What the experts think
Lisa Suennen, the senior managing director at GE Ventures, overseeing the company’s healthcare venture fund, says in a MedCity News article that one implication of the volume of digital health deals in the first quarter of the year implies there are simply too many companies. “Perhaps it’s just me,” she writes, “but it’s getting harder and harder to tell the difference between the myriad of entrants in a variety of categories.”
An article published on Healthcare Dive in January, well before most of the deals detailed in first quarter reports were made, points out that “The US stock market overall is getting smaller and companies are delisting faster than new companies are filing IPOs…Digital health exists within that larger industry trend and faces the same problems.”
If 2018 continues the way it has started, this year will be an amazing year for digital health startups.