Rock Health: Digital Health Funding Tops $849M In First Half of 2013

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Digital health funding totals $849M in the first half of 2013 according to recent 2013 Midyear Digital Health Funding Report by Rock Health.

Rock Health, a digital health seed accelerator for startups today released their 2013 Midyear Digital Health Funding Report, an in-depth analysis report of digital health funding in first half of 2013. The report found funding of digital health companies continued to grow overall, totaling $849M in the first half of 2013, representing a 11 percent growth in investment and 24% growth in deals YoY. By comparison to last year, overall VC funding was down 6% in the first quarter of 2013. Additonally, venture funding of traditional healthcare companies continues to decline, medical devices are down 29% and biotech is down 2%; software is up 38% (source: PwC MoneyTree).

The report produced by Malay Gandhi and Halle Tecco with help from Daniel Axelson (NEA), Kyra Deeth-Stehlin (Rock Health), Erin Timble (Rock Health), and Elise XU (Rock Health) sources data from Capital IQ, SEC company webites, Crunchbase, NVCA, and the Rock Health funding database. Rock Health only looks at digital health deals of $2M or more, excluding the crowdfunding data mentioned in the report findings.

Key findings include:

– 90 digital health companies each raised more than $2 million dollars in the first half of 2013

  • Of these companies, 32% are located in California, nearly double that of the next two states combined, Massachusetts (9%) and New York (8%).

– Four investors made three or more digital health investments in the first half of 2012.

  • The Social+Capital Partnership led the way with five digital health investments each, followed closely by Norwest. There were no co-investments by these two firms, demonstrative of a divergent focus in digital health investing among the most active investors.

  • 145 identified investors participated in 1-2 deals each.

– The emerging themes of digital health investing in 2013 are remote patient monitoring, analytics and big data, electronic health records, wellness, and personal health tools and tracking.

– The biggest deals of 2013 include:

  • Proteus Digital Health $45M

  • Health Catalyst $41M

  • Watermark Medical $32M

  • Nant Health $31M

  • HealthTap $24M

– With few seed investors ($250K-$1M range), crowdfunding has become an attractive option for digital health entrepreneurs.

The full report can be seen below: