Global venture capital (VC) funding in digital health, including private equity and corporate venture capital, declined in 2019 with $8.9 billion raised in 615 deals, a 6% drop compared to $9.5 billion in 698 deals in 2018. Total corporate funding for Digital Health companies – including VC, debt, and public market financing – reached $10.1 billion in 2019.
To learn more about the report, visit: https://mercomcapital.com/product/q4-annual-2019-digital-health-healthcare-it-funding-ma-report
In 2019, debt and public market financing for Digital Health companies decreased by half from the previous year, with approximately $1.7 billion raised in 20 deals in 2019, compared to $3.5 billion in 21 deals in 2018.
Approximately 67% of Digital Health funding went to U.S. companies in 2019, with $5.9 billion in 426 deals compared to $7 billion in 420 deals in 2018, a 16% decline in funding year-over-year (YoY). The United Kingdom was second with $853 million, followed by China with $663 million and France with $372 million.
Since 2010, Digital Health companies have received $44 billion in VC funding in over 4,500 deals and almost $14 billion in debt and public market financing (including IPOs), bringing the cumulative investments into the sector to $58 billion. There were a total of five IPOs in 2019.
Large funding deals declined in 2019, with eight companies raising $100 million or more compared to 2018 when 16 companies raised over $100 million each.
“After three consecutive years of growth, venture deals, and dollars for digital health companies declined in 2019. After a long dry spell, there were four U.S. IPOs, but their performance so far has been underwhelming. M&A activity also declined in 2019. The big winners were telemedicine companies, with a 55% increase in funding YoY while digital health products that were powered by AI, brought in over $2 billion,” said Raj Prabhu, CEO of Mercom Capital Group.
Consumer-centric companies brought in $5.3 billion in 354 deals in 2019, up just 2% from $5.2 billion raised in 447 deals in 2018. Practice-centric companies raised close to $3.6 billion in 261 deals in 2019, a 16% decrease compared to the $4.3 billion in 251 deals in 2018.
The top funded categories in 2019 included: Telemedicine with $1.8 billion, closely followed by Data Analytics with $1.6 billion, mHealth Apps with $1.2 billion, Clinical Decision Support with $748 million, Mobile Wireless Technology with $556 million, and Booking with $537 million.
Categories that witnessed significant YoY funding growth included Healthcare Service Booking, Telemedicine, Medical Imaging, Wellness, and Clinical Decision Support.
In 2019, Telemedicine companies received the highest amount of VC funding, followed by Data Analytics, mHealth Apps, Clinical Decision Support, Mobile Wireless, and Healthcare Booking companies.
The top VC funding rounds in 2019 included: Babylon with $550 million, Tencent Trusted Doctors with $250 million, Collective Health with $205 million, Capsule with $200 million, and Tempus with $200 million.
There were a total of 1,288 investors that participated in Digital Health deals in 2019, compared to 1,396 investors in 2018. The top investors in 2019 included: F-Prime capital with 11 deals, GV (formerly Google Ventures), and Optum Ventures with eight deals each.
The most active VC investors since 2010 included: Khosla Ventures, Sequoia Capital, New Enterprise Associates (NEA), and Merck Global Health Innovation Fund (GHI).
There were 169 M&A transactions in 2019 compared to the 223 transactions in 2018, a 24% decline in deal activity. Nineteen companies participated in multiple transactions in 2019.
mHealth Apps were the most acquired category in 2019 with 27 transactions, followed by Practice Management Solutions with 17 transactions, and Telemedicine with 14 transactions.
There were 287 companies that made multiple acquisitions from 2010 to 2019, and about 50 companies have acquired five companies or more.
The top five disclosed M&A transactions in 2019 were: Dassault Systemes’s acquisition of Medidata for $5.8 billion, EQT VIII Fund (EQT) and Canada Pension Plan Investment Board (CPPIB), which acquired a majority stake in Waystar for $2.7 billion, Google’s acquisition of Fitbit for $2.1 billion, Golden Gate Capital’s acquisition of Ensemble Health Partners (51% stake) for $1.2 billion, Agfa-Gevaert Group’s acquisition of Dedalus Holding for $1.07 billion, and Baring Private Equity Asia’s acquisition of healthcare IT consulting company, CitiusTech, for $1 billion.
There were 580 companies and investors covered in this 136 page report, which contains 110 charts, graphs, and tables.
To learn more about the report, visit: https://mercomcapital.com/product/q4-annual-2019-digital-health-healthcare-it-funding-ma-report
