Venture capital funding in the health IT sector almost doubled quarter over quarter for the first part of 2017, coming in at $1.6 billion in 165 deals compared to $845 million in 159 deals in Q4 2016, research firm Mercom Capital Group said in its new report. 

VC funding in Q1 2017 also was up compared with Q1 2016, when nearly $1.4 billion was raised in 146 deals, Mercom Capital said. The digital health sector now has received $20 billion in VC funding since 2010, the firm added.

In Q1 2017, total corporate funding in health IT companies – including VC, debt and public market financing – came to $1.8 billion compared with $1 billion in Q4 2016, the firm found.

“Digital health funding is off to a fast start this year, and there was no visible ‘Trump effect’ on investments in the sector, at least in the first quarter,” remarked Raj Prabhu, CEO and co-founder of Mercom Capital Group. “And publicly traded digital health companies actually fared much better in Q1 than last year.”

Healthcare practice-centric companies received 35 percent of the funding in Q1 2017, raising $574 million in 50 deals compared with $261 million in 42 deals in Q4 2016, Mercom Capital found. Consumer-centric companies received 65 percent of the funding in the first quarter, bringing in $1 billion in 115 deals compared with $584 million in 117 deals in Q4 2016.

The top funded areas in Q1 2017 were: appointment booking, $315 million; mobile/wireless, $230 million; data analytics, $193 million; population health management, $115 million; telemedicine, $112 million; and social health network, $102 million, according to the firm.

There were 49 mergers and acquisitions transactions (seven disclosed) in the health IT sector in Q1 2017 compared with 42 transactions (11 disclosed) in Q4 2016, Mercom Capital reported.

Practice management system companies were involved in the most M&A transactions with six, followed by apps and data analytics with five each, then consulting and telemedicine with four apiece, the firm added. The top disclosed M&A transactions were: the $1.1 billion acquisition of CoverMyMeds by McKesson; Eliza Corp.’s $170 million acquisition from Parthenon Capital Partners by HMS Holdings; Jiff’s $134 million purchase of Castlight Health; and the acquisition of HCI Group for $110 million by Tech Mahindra.