Digital health VC funding reaches $5.1B in first half of year
2019 is shaping up to be a banner year for venture capital funding for digital health companies, with $5.1 billion raised in 318 deals in the first half of 2019.
The activity in the first half of 2019 compares with $4.9 billion in 383 deals in the first six months of 2018.
According to research firm Mercom Capital Group, which compiled the data in a new report, this is the highest amount raised by digital health companies in the first six months of any year.
The top funded technology areas in the first half of 2019 included analytics, $1.1 billion; telemedicine, $896 million; mHealth apps, $627 million; wellness, $341 million; healthcare booking, $336 million; clinical decision support, $287 million; wearable sensors, $285 million; mobile wireless, $264 million; and healthcare benefits, $208 million.
The top VC deals in the first half of 2019 were $250 million raised by Tencent Trusted Doctors; $205 million raised by Collective Health; $200 million raised by Tempus; $170 million raised by Doctolib; and $100 million raised by Health Catalyst.
In addition, the Mercom Capital Group reveals that total corporate funding in digital health companies—including VC, debt, and public market financing—set a new record for the second quarter with $3.3 billion, compared with $2.2 billion in the first quarter of this year, for a total of $5.5 billion.
While venture capital funding for digital health was strong in the first half of 2019, mergers and acquisitions activity was not. In the first half of 2019, there were a total of 91 digital health M&A transactions vs. 116 in the same period in 2018.
“Funding activity was robust in digital health in the first half of 2019, while M&A activity was weak,” says Raj Prabhu, CEO of Mercom Capital Group. “Weak M&A activity has not affected investment activity over past years. We are in an ‘invest first and ask questions later’ environment where investors are more worried about missing out in this hot space.
“After a long hiatus, we are seeing several digital health companies entering the IPO market in the United States,” adds Prabhu. “Successful IPOs could open the floodgates, whereas if IPOs fizzle out, it could shut the IPO exit path for many digital health companies.”