VC funding in digital health surges 32% to $9.5 bn in 698 deals

Venture capital (VC) funding in Digital Health, including private equity and corporate VC, rose 32 percent in 2018 to reach $9.5 billion in 698 deals from $7.2 billion in 778 deals in 2017, according to Mercom Capital Group.
Chart on Digital Health VC Funding 2010-2018Corporate funding for Digital Health companies, including debt and public market financing, grew 58 percent to $13 billion in 2018 from $8.2 billion in 2017.

Debt and public market financing for Digital Health increased more than three-fold with ~$3.5 billion in 21 deals in 2018 against $1 billion in 34 deals in 2017.

US-based digital health companies raised ~$7 billion in 2018 with $2.5 billion from other countries.

Since 2010, digital health companies have received ~$47 billion in VC, debt and public market financing.

“Funding deals have significantly outpaced M&A and IPO activity and exits continue to be a big challenge for digital health companies,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said.

Categories that received the most funding: Data Analytics with $2.1 billion, mHealth Apps with $1.3 billion, Telemedicine with $1.1 billion, Mobile Wireless companies with $847 million, Clinical Decision Support with $714 million, and Wearable Sensors with $703 million.

Top VC funding rounds include 23andMe with $300 million, American Well with $291 million, Butterfly Network with $250 million, HeartFlow with $240 million, and WuXi NextCode, Helix, and SomaLogic with $200 million each.

1,396 investors participated in digital health in 2018.

There were 223 M&A transactions in 2018, compared to 203 in 2017. Eighteen companies made multiple acquisitions in 2018.

mHealth Apps were the most acquired category in 2018 with 32, followed by Data Analytics with 27, and Practice Management Solutions with 22.

The largest deal in 2018 was the acquisition of athenahealth for $5.5 billion by Veritas Capital and Elliott Management.