Venture capital investment soars in healthcare IT

Venture capital funding for emerging healthcare information technology companies in the first nine months of 2017 has already surpassed 2016's total, which was an all-time record in excess of $5 billion in a calendar year.

That data, from Mercom Capital Group, a global communications and research firm, shows that venture capital in 2017 will set a new record for investment in the healthcare IT sector.

Global venture capital funding in the first nine months of 2017 totaled $5.5 billion, 31 percent more than the $4.2 billion that was raised in 2017, Mercom Capital reported. It also reported 586 VC deals so far in 2017, compared with 463 over the year-ago period in 2016.

In the third quarter of 2017, 227 deals for venture capital were recorded, raising $1.5 billion.

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“The record-breaking funding year continues for digital health companies,” says Raj Prabhu, CEO and co-founder of Mercom Capital. “The 227 funding deals in the third quarter was the most ever for a single quarter. The third quarter was all about data analytics, with those companies garnering almost a third of the funding in the third quarter, and artificial intelligence companies receiving more than $200 million.”

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Healthcare practice-centric companies received $731 million in 78 deals, accounting for 49 percent of the funding in the just-completed third quarter, compared with $745 million in 63 deals in the second quarter of this year.

Consumer-centric companies accounted for 51 percent of the funding in the just-completed third quarter, raising $751 million in 149 deals—that compares with $1.6 billion in 131 deals in the second quarter of this year.

The top funded areas in the first nine months of this year were data analytics, $1 billion; patient engagement solutions, $686 million; mHealth apps, $549 million; telemedicine, $529 million; booking, $407 million; and mobile wireless, $407 million.

Mercom reported 69 early-stage deals in the third quarter of 2017, including 29 accelerator and incubator deals.

The top VC deals in the third quarter included: $165 million raised by WuXi Nextcode; $75 million raised by M2Gen; $70 million raised by Tempus; $37 million raised by AbleTo; and $34 million raised by HealthEdge.

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