Investor appetite for digital health companies is still strong, despite the coronavirus pandemic. A total of 433 investors funded 145 digital health companies in Q1 2020, and it was the highest-funded quarter (with $3.6 billion) since Mercom started tracking the activity in the sector.
Investment activity in telehealth was robust, defying economic headwinds as investors realize its potential amid the COVID-19 crisis. Telehealth providers attracted over 100 investors in Q1 2020. Among telehealth investors, Lerer Hippeau, High-Tech Gründerfonds, UnityPoint Health Ventures, Creandum, and Optum Ventures, led financing activity during Q1, with multiple investments.
In just the past two months (April and May), telehealth companies have raised over $700 million, according to Mercom’s funding database.
Telehealth providers are seeing a spike in virtual doctor visits; for example, Teladoc reported over 15,000 video requests per day; Doctor on Demand has seen a 50% increase in televisit requests. MDLive typically sees about 4,000 visits per day during flu season; with the COVID-19 pandemic, the company began to see 7,500 visits per day, and as many as 20,000 new patient registrations daily.
The healthcare data analytics segment was second in terms of investors attracting 76 venture capital investors, including Healthworx and Andreessen Horowitz, whom each made two investments. Data analytics companies that use artificial intelligence and machine learning tools were the investors’ top focus.
Clinical decision support software that assists clinicians in making smart, precise treatment decisions was also one of the top investor destinations. Oak HC/FT led funding activity in this segment, which saw 60 venture capitalists during Q1.
Other categories that brought attracted investors were mHealth Apps (focused on care, communications, fitness & wellness). Wearable sensors (that track human body vitals), wellness companies (digital wellness programs provider), practice management solutions, medical billing service companies, mobile health wireless devices makers, and online healthcare service platforms, such as doctor’s appointment scheduling and booking, healthcare price comparison & shopping.
Over 5,000 investors have invested approximately $48 billion in digital health since 2010, according to Mercom’s funding and M&A reports.
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