[{"innerBlocks":[],"name":"core\/freeform","postId":1354,"blockType":{"name":"core\/freeform","keywords":[],"attributes":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"}},"providesContext":[],"usesContext":[],"selectors":[],"supports":{"className":false,"customClassName":false,"reusable":false},"styles":[],"variations":[],"apiVersion":3,"title":"Classic","description":"Use the classic WordPress editor.","category":"text"},"originalContent":"Last year was a record-breaking year for venture capital funding for healthcare IT companies, reaching $9.5 billion for the first time, according to research firm Mercom Capital Group.

Overall, 2018 saw 698 deals with U.S. digital health companies, raising close to $7 billion; the remaining $2.5 billion was raised by companies from other countries. All told, there was a 32 percent increase from the previous record set in 2017 of $7.2 billion in 778 deals.

In particular, the highest funded tech categories last year included data analytics ($2.1 billion), mHealth apps ($1.3 billion), telemedicine ($1.1 billion), mobile wireless technology ($847 million), clinical decision support ($714 million) and wearable sensors technology ($703 million).

While consumer-centric vendors garnered $5.2 billion in 447 deals in 2018\u2014up 24 percent from $4.2 billion raised in 514 deals in 2017\u2014practice-centric companies raised nearly $4.3 billion in 251 deals last year, a 43 percent increase over the $3 billion raised in 264 deals in 2017.

Among the top VC funding rounds in 2018 were 23andMe ($300 million), American Well ($291 million), Butterfly Network ($250 million), HeartFlow ($240 million), and WuXi NextCode, Helix and SomaLogic ($200 million each).

Interestingly, a third of the funding was raised by just 18 companies, each bringing in more than $100 million in 2018.

Also See<\/b>: HIT startups enjoy strong VC funding in Q1 2017<\/a>

\u201cVenture capital funding in digital health hit another high with almost $10 billion raised,\u201d said Raj Prabhu, CEO and co-founder of Mercom Capital Group. \u201cVenture capitalists\u2019 love of digital health companies is evident, but Wall Street is not yet convinced, as more than 60 percent of publicly traded digital health stocks traded below the S&P 500 in 2018.\u201d

In fact, of the 27 digital health public companies that Mercom tracks, only 10 outperformed the S&P 500 in 2018.

\u201cThere were two IPOs that brought in a total of $1.23 billion in 2018,\u201d states Mercom\u2019s report, noting that \u201cnot a single healthcare IT\/digital health company launched an IPO in 2017.\u201d

Nonetheless, 2018 was a record year for digital health mergers and acquisitions (M&A) with 223 transactions\u2014the highest to date\u2014compared with 203 transactions in 2017. Practice-focused vendors dominated M&A activity last year, representing 137 of the 223 transactions, while consumer-focused companies accounted for 86 M&A transactions in 2018.

According to Mercom, last year\u2019s top M&A transactions were the acquisition of athenahealth by Veritas Capital and hedge fund Elliott Management ($5.5 billion); Platinum Equity\u2019s purchase of LifeScan business from Johnson & Johnson ($2.1 billion); Roche\u2019s buying of Flatiron Health ($1.9 billion); Vista Equity Partners\u2019s acquisition of MINDBODY ($1.9 billion); and Inovalon\u2019s purchase of ABILITY Network ($1.2 billion).

\u201cFunding deals every year have significantly outpaced M&A and IPO activity and exits continue to be a big challenge for digital health companies,\u201d added Prabhu.
","saveContent":"Last year was a record-breaking year for venture capital funding for healthcare IT companies, reaching $9.5 billion for the first time, according to research firm Mercom Capital Group.

Overall, 2018 saw 698 deals with U.S. digital health companies, raising close to $7 billion; the remaining $2.5 billion was raised by companies from other countries. All told, there was a 32 percent increase from the previous record set in 2017 of $7.2 billion in 778 deals.

In particular, the highest funded tech categories last year included data analytics ($2.1 billion), mHealth apps ($1.3 billion), telemedicine ($1.1 billion), mobile wireless technology ($847 million), clinical decision support ($714 million) and wearable sensors technology ($703 million).

While consumer-centric vendors garnered $5.2 billion in 447 deals in 2018\u2014up 24 percent from $4.2 billion raised in 514 deals in 2017\u2014practice-centric companies raised nearly $4.3 billion in 251 deals last year, a 43 percent increase over the $3 billion raised in 264 deals in 2017.

Among the top VC funding rounds in 2018 were 23andMe ($300 million), American Well ($291 million), Butterfly Network ($250 million), HeartFlow ($240 million), and WuXi NextCode, Helix and SomaLogic ($200 million each).

Interestingly, a third of the funding was raised by just 18 companies, each bringing in more than $100 million in 2018.

Also See<\/b>: HIT startups enjoy strong VC funding in Q1 2017<\/a>

\u201cVenture capital funding in digital health hit another high with almost $10 billion raised,\u201d said Raj Prabhu, CEO and co-founder of Mercom Capital Group. \u201cVenture capitalists\u2019 love of digital health companies is evident, but Wall Street is not yet convinced, as more than 60 percent of publicly traded digital health stocks traded below the S&P 500 in 2018.\u201d

In fact, of the 27 digital health public companies that Mercom tracks, only 10 outperformed the S&P 500 in 2018.

\u201cThere were two IPOs that brought in a total of $1.23 billion in 2018,\u201d states Mercom\u2019s report, noting that \u201cnot a single healthcare IT\/digital health company launched an IPO in 2017.\u201d

Nonetheless, 2018 was a record year for digital health mergers and acquisitions (M&A) with 223 transactions\u2014the highest to date\u2014compared with 203 transactions in 2017. Practice-focused vendors dominated M&A activity last year, representing 137 of the 223 transactions, while consumer-focused companies accounted for 86 M&A transactions in 2018.

According to Mercom, last year\u2019s top M&A transactions were the acquisition of athenahealth by Veritas Capital and hedge fund Elliott Management ($5.5 billion); Platinum Equity\u2019s purchase of LifeScan business from Johnson & Johnson ($2.1 billion); Roche\u2019s buying of Flatiron Health ($1.9 billion); Vista Equity Partners\u2019s acquisition of MINDBODY ($1.9 billion); and Inovalon\u2019s purchase of ABILITY Network ($1.2 billion).

\u201cFunding deals every year have significantly outpaced M&A and IPO activity and exits continue to be a big challenge for digital health companies,\u201d added Prabhu.
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VC funding for digital health reaches $9.5B in 2018

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