Healthcare IT / Digital Health Sector Sets All-time Record with $4 Billion in VC Funding in 1H 2017, $2.4 Billion in Q2 2017, Reports Mercom Capital Group

Global VC funding for Healthcare IT / Digital Health companies in 1H of 2017 was 36 percent higher year-over-year (YoY) with a record $4 billion raised in 359 deals compared to the $3 billion raised from 286 deals in 1H 2016. Q2 2017 VC funding also was at it’s highest ever, increasing 47 percent to $2.4 billion in 194 deals compared to the $1.6 billion raised in 165 deals in Q1 2017. Q2 2017 had the second most deals recorded (194) in a quarter since 2010. In Q3 2014, there were 212 deals.

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The Digital Health sector has now received $22.5 billion in the 3,031 VC funding deals Mercom has tracked since 2010.

Total corporate funding in Health IT companies – including VC, debt, and public market financing – came to $2.4 billion in Q2 2017 compared to $1.8 billion in Q1 2017.



“This was the best half and best quarter ever for digital health companies as a result of a few very large deals. We are now comfortably on pace to have the biggest funding year for digital health companies,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. “Even with such robust funding, there is still no sign of any digital health IPOs and M&A activity is yet to catch up to the funding momentum.”

Healthcare practice-centric companies received 31 percent of the funding in Q2 2017, raising $745 million in 63 deals compared to $574 million in 50 deals in Q1 2017. Consumer-centric companies accounted for 69 percent of the funding this quarter, raising $1.6 billion in 131 deals compared to $1 billion in 115 deals in Q1 2017.

The top funded areas in 1H 2017 were: Patient Engagement Solutions $684 million, Data Analytics $458 million, mHealth Apps $399 million, Booking $391 million, Telemedicine $297 million, Mobile Wireless $275 million, and Electronic Medical Records $237 million.


The top funded categories in Q2 2017 were: Patient Engagement companies with $669 million, mHealth Apps companies with $325 million, Data Analytics companies with $264 million, and Electronic Medical Records companies with $236 million.


There were 68 early stage deals in Q2 2017, including two accelerator and incubator deals.

The Top VC deals in Q2 2017 included: $500 million raised by Outcome Health, $231 million raised by Modernizing Medicine, $140 million raised by PatientPoint, $90 million raised by Blink Health, $75 million raised by WuXi Nextcode, and $70 million raised by ClassPass.


A total of 454 investors (including two accelerators/incubators) participated in funding deals in Q2 2017 compared to 309 investors in Q1 2017, of which four were accelerators/incubators.

Twenty-five different countries recorded Healthcare IT VC funding deals in Q2 2017.

In 1H 2017, there were a total of 90 Healthcare IT M&A transactions, compared to 110 in 1H 2016. M&A activity in the second quarter of 2017 was down with 41 M&A transactions (five disclosed) compared to the 49 M&A transactions (seven disclosed) in Q1 2017.

Practice Management Solutions and Data Analytics companies were involved in the most M&A transactions in Q2 2017 with five each, followed by Medical Imaging companies with three transactions.

Prominent M&A transactions in Q2 2017 included: the acquisition of Best Doctors for $440 million by Teladoc, Cochlear’s acquisition of Sycle for $78 million, athenahealth’s acquisition of Praxify Technologies for $63 million, and the acquisition of Entrada by NextGen Healthcare (a subsidiary of Quality Systems) for $34 million.


This report is 102 pages in length, contains 66 charts, graphs and tables, and covers 732 investors and companies.

Mercom’s comprehensive report covers deals of all sizes across the globe.

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