Rock Health, provider of full-service funding to promising entrepreneurs breaking into healthcare has released their Digital Health Funding: Year in Review 2015 Report, an in-depth analysis report of all digital health funding in 2015. The report found digital health funding in 2015 surpassed $4.3B, up from $4.1B in 2014. This represents 278 deals across 248 companies, closing with a new record average deal size of $15.6M.
The report produced by Halle Tecco, Mara Perman, Teresa Wang, Emily King with help from Lauren White and Diljot Chhina sources data from Capital IQ, SEC company websites, Crunchbase, NVCA, press releases and the Rock Health funding database.
Here are some key trends to know:
1. Digital health funding accounted for 7% of all total venture funding 2015
2. Digital health deal volume overall was flat from 2014. However, 2015 was a record year for the number of late stage deals Series C and beyond.
3. In 2015, Seed and Series A deals accounted for majority of digital health funding with Series C and later stage deals representing only 18% and 25% of all deal volume.
4. The six largest digital health funding deals of the year topped at nearly $1B, representing 17% of all 2015 funding.
5. Dr. Patrick Soon-Shiong’s Nant Health landed the largest digital health deal of the year raising $200M in funding, bringing its total total funding to date to $680M.
6. The top six digital health categories accounted for 51% of all digital health funding in 2015, with payer administration entering the rankings for the first time.
- Healthcare Consumer Engagement $613M
- Wearables and Biosensing $489M
- Personal Health and Tracking $407M
- Payer Administration $252M
- Telemedicine $234M
- Care Coordination $208M
7. This year’s digital health funding reflected a growing focus on creating a consumer-centric world for healthcare. Funding in the personal health tools and tracking category totaled more than that in the care coordination and life sciences categories combined.
8. 336 venture firms invested in at least one digital health deal in 2015 with a growing number of investors who have done three or more deals, up 40% from last year to 49 unique investors. The report found One fifth of the investors who have done ten or more deals since 2011 are strategic / corporate funds.
9. Bay Area-based digital health companies accounted for almost 40% of overall digital health investments in 2015, while Boston Boston beat out New York City to become the second largest digital health hub. Metro areas Miami, Salt Lake, Orlando, and Denver each brought in more than $65M in funding.
10. Digital health M&A deals nearly doubled in transaction volume in 2015 totaling 180 M&A deals representing over $6B in disclosed transactions and averaging $140M per disclosed deal.
11. 5 digital health companies went public with three of the five currently trading above IPO price. Fitbit represented the biggest successful digital health IPO this year with a market cap of $6.7B and is currently the third largest publicly traded digital health company behind Cerner and IMS Health.