Health IT VC funding reached $1.6 billion in 165 deals compared to $845 million in 154 deals in Q4 2016, almost doubled quarter-over-quarter (QoQ), according to the latest report from Mercom Capital Group. The report finds that VC funding in Q1 2017 was also up compared to Q1 2016 when nearly $1.4 billion was raised in 146 deals. Since 2010, VC funding in the Healthcare IT sector has now crossed $20 billion (2010 – Q1 2017).
Here are ten key trends to know from the Mercom’s latest report:
1. 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.
2. Total corporate funding in Health IT companies – including VC, debt and public market financing came to $1.8 billion compared to $1 billion in Q4 2016.
3. Healthcare practice-centric companies received 35 percent of the funding in Q1 2017, raising $574 million in 50 deals compared to $261 million in 42 deals in Q4 2016.
4. Consumer-centric companies received 65 percent of the funding this quarter, bringing in $1 billion in 115 deals compared to $584 million in 117 deals in Q4 2016.
5. The top VC deals this quarter included: $200 million raised by Hudong Feng Technology (Haodaifu), $115 million raised by Alignment Healthcare, $100 million raised by PatientsLikeMe, $90 million raised by Nuna, and $85 million raised by PointClickCare.
6. A total of 306 investors (including four accelerators/incubators) participated in funding deals in Q1 2017 compared to 340 investors in Q4 2016, of which two were accelerators/incubators.
7. There were 49 M&A transactions (seven disclosed) in the Healthcare IT sector in Q1 2017 compared to 42 transactions (11 disclosed) in Q4 2016.
8. The top disclosed M&A transactions were: $1.1 billion acquisition of CoverMyMeds by McKesson, Eliza Corporation’s $170 million acquisition from Parthenon Capital Partners by HMS Holdings, Castlight Health’s $134 million buy of Jiff, and HCI Group for $110 million by Tech Mahindra.
9. Practice Management Solutions 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.
10. There were 65 early round deals, including 14 Accelerator and Incubator deals. A total of 306 investors (including four accelerators/incubators) participated in funding deals in Q1 2017 compared to 340 investors in Q4 2016, of which two were accelerators/incubators.
