Capital raised through IPOs outpaces VC
learn more about the report, visit: http://bit.ly/MercomHITQ22015
Capital Group, llc, a global communications and research firm, released its report
on funding and mergers and acquisitions (M&A) activity for the Healthcare
Information Technology (IT) / Digital Health sector for the second quarter of
2015. Mercom’s comprehensive report covers deals of all sizes across the globe.
capital (VC) funding, including private equity and corporate venture capital, in
the Health IT / Digital Health sector increased 53 percent QoQ, coming in at $1.2
billion in 138 deals compared to $784 million in 142 deals in Q1 2015, but was
down nearly 30 percent compared to the same quarter of last year. Debt and public market financing in the sector
rose to $1.6 billion in eight deals
including four IPOs, bringing the total corporate funding raised in the sector
for Q2 2015 to $2.8 billion.
funding has reached almost $2 billion in the first half of 2015 compared to
$2.6 billion during the same period in 2014.
the Healthcare IT sector, companies raised more money through IPOs than venture
capital this quarter,” commented Raj Prabhu, CEO and Co-Founder of Mercom
Capital Group. “Growth in public market financing is an encouraging sign for
companies in this sector as it opens up another avenue for funding and an exit
path for investors. That said, out of 14 IPOs since 2012, six have decreased in
value over their IPO price as of the end of last quarter.”
practice-centric companies raised $473 million in 41 deals compared to $347
million in 44 deals in Q1 2015. The areas
that received the most funding under this category were Clinical Decision Support companies with $206
million, followed by Data Analytics companies with $91 million, Electronic
Health Record (EHR) companies with $26 million and Practice Management
Solutions companies with $20 million.
companies raised $724 million in 97 deals this quarter compared to $437 million
in 98 deals in Q1 2015. Mobile Health companies brought in $214 million in 37
deals compared to $282 million in 56 deals last quarter, with mHealth Apps receiving
$106 million, compared to the $220 million raised in Q1 2015. Personal Health/Wellness
companies raised $209 million in 20 deals followed by Telehealth companies which
raised $152 million in 18 deals. Rating & Comparison Shopping companies raised
$149 million in 20 deals.
quarter Telehealth, Personal Health/Wellness, and Rating and Comparison
Shopping companies all had their best fundraising quarter, while funding into Mobile
Health and Apps dropped,” further commented Prabhu.
There were 39 early-stage
deals under $2 million, including six accelerator/incubator deals. Accelerator
deals have continued to slow down over the last three quarters.
Top VC funding
deals in Q2 2015 were the $200 million raised by NantHealth, a cloud-based
healthcare IT company delivering care through a single integrated clinical
platform; the $92 million raised by Virgin Pulse, a developer of an online
employee wellness and engagement platform; the $50 million each secured by Doctor on Demand, a telemedicine platform
that enables video consultation with a licensed U.S. physician via mobile apps,
and MDLIVE, a provider of virtual telehealth consultations with U.S.
board-certified physicians and licensed therapists through a HIPAA-compliant
total of 271 investors including two
accelerators/incubators participated in Healthcare IT deals this quarter, 29
of which participated in multiple rounds. The investors with the highest
number of funding deals this quarter included Venrock with five, followed by 500
Startups, Cambia Health Solutions, Khosla Ventures, Qualcomm Ventures, Rock
Health, Slow Ventures and Tencent Holdings with three each.
Globally, U.S. companies
raised greater than $1 billion in 111 deals. Fourteen other countries: Canada, Chile, China, Finland, Germany, India, Indonesia,
Israel, the Netherlands, Poland, Singapore, Sweden, Switzerland and the UK
recorded deals this quarter. In the United States, 37 deals came out of
California, followed by New York which recorded 13 deals, Massachusetts with 11
deals and Florida with six deals.
Announced debt and public
market financing in Health IT rose to $1.6 billion in eight deals this quarter
compared to $975 million in seven deals in Q1 2015. There were four IPOs which together accounted
for $1.4 billion. There were a
number of large IPOs in the second quarter, led by wearable device maker
Fitbit’s $841.2 million offering; Press Ganey Associates, a provider of patient
satisfaction surveys and advisory services to health care providers, raised
$256 million; Evolent Health, a population health management company, raised
$225 million and MINDBODY, a provider of scheduling and business management
software for health and wellness companies, raised $100.1 million.
were 53 M&A transactions (eight disclosed) in the Health IT sector this
quarter compared to 56 transactions (14 disclosed) in Q1 2015. Practice-focused
companies accounted for the greatest number of M&A transactions with 43 of
the 53, while consumer-centric companies had 10 transactions. Twenty-seven HIM companies
were acquired this quarter followed by nine Service Providers, six Revenue
Cycle Management companies and four Telehealth companies.
largest disclosed M&A transaction was the $500 million acquisition of Virtual
Radiologic Corporation (vRad), a provider of teleradiology and telemedicine
services, by MEDNAX. This was followed by the $140 million acquisition of Acclaris,
a provider of SaaS-based technology and services for consumer-driven health
care and reimbursement accounts, by Towers Watson.
Citadel Group acquired PJA Solutions, a provider of laboratory information
systems software products for diagnostic laboratories and clinical applications
in public hospitals and related sectors, for $45 million. Teladoc acquired Stat
Health Services, a provider of telemedicine services for non-emergency health
conditions, for $30.5 million and Arcadia Healthcare Solutions acquired Sage
Technologies, a provider of management and analytics software for managed-care
businesses and accountable care organizations, for $28 million.
were a total of 516 companies and investors covered in this comprehensive report.
About Mercom Capital Group
Mercom Capital Group, llc,
is a global communications and consulting firm focused on healthcare
information technology (HIT), cleantech and financial communications. Mercom
delivers highly respected industry market intelligence reports covering Health
IT/Digital Health, Solar Energy, Wind Energy and Smart Grid. Our reports
provide timely industry happenings and ahead-of-the-curve analysis specifically
for C-level decision making. Mercom’s consulting division advises
companies on new market entry, custom market intelligence and overall strategic
decision-making. Mercom’s communications division helps companies and
financial institutions build powerful relationships with media, analysts,
government decision-makers, local communities and strategic partners. For
more information about Mercom Capital Group, visit: http://www.mercomcapital.com. To
get a copy of Mercom’s popular market intelligence reports, visit: http://mercomcapital.com/market_intelligence.php.
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