Telehealth Companies Raised $1.8 Billion in 2019

Telehealth technologies globally, including telemedicine and remote monitoring companies, received $1.8 billion in venture funding in 2019, which was the largest amount received by any digital health technology category in the year. Funding increased by 42% increase year-over-year compared to $1.3 million in 2018.

The Telehealth category drove the financing activity in 2019 due to two large funding deals by Babylon and Tencent Trusted Doctors.

Telehealth Companies Raised $1.8 Billion in 2019

Almost 200 investors participated in telehealth deals in 2019. Spring Lake Equity Partners, Sound Ventures, Aetna, Echo Health Ventures, Startup Health, and Y Combinator each invested in two telehealth companies in 2019.

Within Telehealth, Telemedicine companies accounted for $1.7 billion in 2019, the highest so far since 2010, and remote monitoring companies received the remaining $61 million.

Telehealth Companies Raised $1.8 Billion in 2019

Of the $1.8 billion VC funding raised by the Telehealth companies in 2019, the companies originated in the United States secured $775 million, and the rest of the world accumulated over $1 billion.

In 2019, Telehealth companies focused on Preventive Care led the funding activity with 40 deals.

Telehealth VC Funding By Care Services in 2019

What is driving telehealth investments

  • Telehealth is convenient and reduces the cost of care
  • Along with other digital health tools, telehealth is improving engagement and proactive management of health conditions
  • Over ten telehealth technologies have received FDA approvals
  • The most significant factor driving investments is the increased reimbursement for telehealth services by the US Centers for Medicare & Medicaid Services
  • There is a viable revenue model for telehealth companies because of reimbursement for telehealth services, which is attractive for investors unlike other consumer-centric digital health products

In total, the Telehealth sector has gathered approximately $5.5 billion since 2010, according to Mercom data. Telemedicine companies accounted for almost 90% of the $5.5 billion.

Top 5 Telehealth funding deals in 2019:

Babylon, a London-based telemedicine company that uses AI, closed a $550 million round of funding at more than $2 billion valuation.

Tencent-backed online health care platform Tencent Trusted Doctors raised $250 million at more than $1 billion valuation.

Roman, an online telehealth platform for erectile dysfunction treatment and men’s health, raised $85 million at a $500 million valuation.

Cityblock, a telehealth company that serves qualifying Medicaid and Medicare beneficiaries who live in city neighborhoods, raised $65 million.

HaloDoc, a provider of telemedicine services via chat, video, and voice calls, raised $65 million.

In terms of exits, there were a total of 17 acquisitions in telehealth in 2019 compared to 13 in 2018.