Report: Mobile health companies raised $400 million last quarter

By Jonah Comstock
09:30 am
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HITVCFundingQ22013-Q22014Healthcare information technology companies, including mobile and digital health companies, raised more than twice as much in total venture capital funding in the second quarter of 2014 as they did in the first, according to a new report from communications and consulting firm Mercom.

"It was a quarter of several milestones," Raj Prabhu, CEO and cofounder of Mercom Capital Group, said in a statement. "It was the first billion dollar fundraising quarter for the sector which has now raised almost $7 billion in venture funding since 2010. Healthcare IT funding rounds have now crossed 1,000. We are also seeing mobile health companies continue to outraise other technologies, and have now brought in over a billion dollars since 2010." 

Companies raised $1.8 billion in 161 investments during Q2, up from $861 million in Q1, including 10 transactions of more than $50 million. Four of those 10 deals were identified specifically in the press release: NantHealth's $135 million raise, Flatiron Health's $130 million raise, a $125 million raise by Alignment Healthcare, and a $120 million raise by Proteus Digital Health.

According to Mercom, mobile health specifically took in $401 million -- $129 million went to 23 companies with app-centric offerings, while 17 companies working on wearables took in $226 million. Five other mobile health companies took in $46 million.

The leading category was practice-centric companies, which received 61 percent of investments, a total of $1.1 billion (61 deals). Specifically, $220 million went to practice management, $204 to data analytics, and $144 million to population health management. Consumer health had more deals in the quarter (100), but less total funding -- $678 million. That includes the $401 million for mobile health, as well as $115 million in 23 deals for personal health and $61 million across 12 deals for "scheduling, rating and shopping".

In addition to VC funding, Mercom tracked mergers and acquisitions (disclosed and some undisclosed), as well as initial public offerings in the health IT space.

According to the report, there were 57 acquisitions this quarter, a record number, up from last quarter's 54. Twelve of those were disclosed, and six of them were in the mobile health space. Mercom listed out several acquisitions including the St. Jude buyout of CardioMEMS, now valued at nearly $450 million, and the $150 million acquisition of remote patient monitoring company Corventis by medical device giant Medtronic.

For IPOs, of course, the report names just two: Imprivata's $86.3 million offering and IMS Health's $1.3 billion launch. When IPO, VC, accelerator funds, and debt funding were all combined together, the total funding for the quarter came to $330 billion.

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