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.