VC Funding in Digital Health Reached a Record $4.9 Billion in 1H 2018, Reports Mercom Capital Group

Global VC funding for Digital Health companies in the first half of 2018 was 22 percent higher year-over-year (YoY) with a record $4.9 billion raised in 383 deals compared to the $4 billion in 359 deals in 1H 2017. Q2 2018 VC funding held strong at $2.4 billion in 196 deals following the $2.5 billion raised in 187 deals in Q1 2018.

Digital Health companies have now received $30.6 billion in the 3,833 VC funding deals Mercom has tracked since 2010.

Total corporate funding in Digital Health companies – including VC, debt, and public market financing – also set a new record at $4.4 billion in Q2 2018 compared to $3 billion in Q1 2018. There was close to $2 billion in IPO and pre-IPO public market financing activity by Chinese companies in 1H 2018.

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Digital Health VC Funding 1H 2017-1H 2018

Digital Health VC Funding Q2 2017-Q2 2018

“Digital Health continues to grow at a record pace and is well on its way to smashing 2017’s record of $7.2 billion in VC funding.” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. “The space is maturing and is beginning to get the regulatory attention it deserves. Simultaneously, the tech giants are boosting digital health in a big way. M&A activity was also up, and overall, it was a very robust first half of 2018 for digital health companies.”

Healthcare practice-centric companies received 29 percent of the funding in Q2 2018, raising $702 million in 58 deals compared to $1.7 billion in 74 deals in Q1 2018. Consumer-centric companies accounted for 71 percent of the funding in Q2 2018, raising $1.7 billion in 138 deals compared to $801 million in 113 deals in Q1 2018.

The top funded areas in 1H 2018 were: Data Analytics with $911 million, Telemedicine with $701 million, Clinical Decision Support with $582 million, mHealth Apps with $535 million, Wearables for $308 million, Mobile Wireless with $272 million, and Wellness with $201 million.

Top-Funded Digital Health Healthcare IT

The top funded categories in Q2 2018 were: Telemedicine companies with $523 million, mHealth Apps with $288 million, Data Analytics for $232 million, Wearables with $215 million, Mobile Wireless for $180 million, and Wellness with $161 million.

Top Funded Digital Health Healthcare IT Categories in Q2 2018

There were 49 early stage deals in Q2 2018, including six accelerator and incubator deals.

The Top VC deals in 1H 2018 included: $291 million raised by American Well, $240 million raised by Heartflow, $200 million raised by Helix, $200 million raised by SomaLogic, $146 million raised by PointClickCare, $110 million raised by Collective Health, $105 million raised by Livongo Health, $100 million raised by DXY (Ting Ting Group), and $80 million raised by Tempus.

Digital Health - Top VC Funding Deals in 1H 2018

A total of 868 investors participated in digital health funding deals in the first half of 2018.

Twenty-two different countries recorded Digital Health VC funding deals in Q2 2018.

In 1H 2018, there were a total of 116 Digital Health M&A transactions, compared to 90 in 1H 2017. M&A activity in the second quarter of 2018 was also up with 68 M&A transactions (13 disclosed) compared to the 48 M&A transactions (13 disclosed) in Q1 2018.

mHealth App companies were involved in the most M&A deals in Q2 2018 with 11 transactions followed by Data Analytics with 10 deals. Practice Management Solutions, Telemedicine, and Wellness companies secured five deals each.

Prominent M&A transactions in 1H 2018 included: the acquisition of LifeScan for $2.1 billion by Platinum Equity, Flatiron Health acquired by Roche for $1.9 billion, Inovalon’s acquisition of ABILITY Network for $1.2 billion, Veritas Capital acquired General Electric’s (GE) Healthcare IT division for $1 billion, and the acquisition of Intermedix by R1 RCM for $460 million.

Digital Health M&A Transaction in 1H 2018 By Disclosed Amount

This report is 115 pages in length, contains 67 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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