Digital health funding in 2014 has already surpassed 2013 total

By Aditi Pai
08:26 am
Share

Rock Health digital health 2014 first halfIn the first half of 2014, digital health funding reached $2.3 billion, according to a report from accelerator Rock Health. The report included data from 143 digital health companies that have raised over $2 million during the past six months.

Funding in the first two quarters of 2014 surpassed total funding for all of 2013, which was $1.97 billion. Deal growth was driven by early-stage companies and year-over-year growth has reached 64 percent so far. In April, Rock Health reported that digital health funding reached nearly $700 million in the first quarter of 2014, and first quarter funding grew 87 percent compared to the first quarter of 2013. 

The largest share of funding during the first half of the year, $211 million, went to companies developing management and administration tools for payers. After that, companies that make digital medical devices designed to treat certain conditions raised a total of $206 million, companies focused on data analysis and aggregation products raised $196 million, companies that offer tools that help consumers purchase healthcare services raised $193 million, and population health management platforms raised $162 million.

NantHealth had the largest deal in the first half of the year. The company raised $135 million. Other large deals included Proteus' $120 million, Zenefits' $67 million, and Doximity's $54 million.

Rock Health also noted that digital health funding surpassed funding in other healthcare sectors including software, biotech, and medical devices. Medical device companies have also been acquiring digital health companies this year. Just within the month of May, medical device company Covidien acquired sports and medical wearables company Zephyr Technology, another medical device company Medtronic acquired peel-and-stick medical sensor company Corventis, and St. Jude acquired bedside heart sensor CardioMEMS following its FDA clearance.

There were 36 investments made in companies in the Bay Area, according to Rock Health's report, and 50 investments overall in California-based digital health companies so far this year. Boston saw 16 deals and New York saw 15, although Rock Health added that both cities doubled in size relative to 2013.

Although a few companies went public in 2014, including price transparency company Castlight Health, clinical communication tool developer Imprivata, and health information aggregator Everyday Health, according to Rock Health, the digital health public index underperformed in the public markets.

For the report Rock Health asked 36 investors which digital health company they believed would IPO next: 28 percent said Practice Fusion, 16 percent said Proteus Digital Health, and 13 percent said ZocDoc, while another 13 percent said Fitbit.

Share