VC Funding in digital health drops by 35 percent

As per report by Mercom Capital Group, venture capital (VC) funding in the digital health sector dipped by about 35 percent, coming in at $784 million in 142 deals compared to $1.2 billion in 134 deals in the fourth quarter of 2014


After registering high investments last year, the first quarter of 2015 has not been so impressive for digital health!

Mercom Capital Group, llc, a global communications and research firm, released its report on funding and mergers and acquisitions (M&A) activity for the Healthcare Information Technology (IT)/ Digital Health sector for the first quarter of 2015. Mercom's comprehensive report covers deals of all sizes across the globe.

Venture capital (VC) funding in the Health IT / Digital Health sector dipped by about 35 percent, coming in at $784 million in 142 deals compared to $1.2 billion in 134 deals in Q4 2014. Announced debt and public market financings in the sector amounted to $975 million in seven deals in Q1 2015 including one IPO, bringing the total corporate funding raised in the sector for Q1 2015, to almost $1.8 billion.
Health IT / Digital Health companies have now raised almost $10 billion in VC funding since 2010.

"Funding fell across the board with the exception of Mobile Health (mHealth), which was the bright spot this quarter. There was also significant M&A activity in the first quarter for mHealth companies. We have already seen 10 M&A transactions in Q1 compared to 21 in all of last year, which bodes well for exits in Mobile Health." commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

Healthcare practice-centric companies raised $347 million in 44 deals in Q1 2015 compared to $568 million in 43 deals in Q4 2014. Areas that received the most funding under this category were Data Analytics companies with $92 million, Data Warehousing companies with $70 million, Health Insurance Exchange companies with $38 million, EHR/EMR companies with $36 million, and Practice Management Solutions companies with $34 million.

Consumer-centric companies raised $437 million in 98 deals this quarter compared to $643 million in 91 deals in Q4 2014. Mobile Health companies continued to attract the most VC funding bringing in $282 million in 56 deals, most of which went to mHealth Apps with $220 million. Telehealth companies secured $65 million while Rating and Comparison Shopping companies brought in $47 million.


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