Digital Health Venture Funding Sees Big Spike in First Half of 2014

July 15, 2014 in News

Digital heath funding for the first six months of 2014 totaled $2.3 billion among 143 companies, more than the total amount raised in 2013, according to a new report from Rock Health, Healthcare IT News reports. 

Details of Findings

The report found that the payer administration arena experienced the largest growth in funding, increasing by 354% from $47 million in 2013 to $211 million in the first six months of 2014.

Other digital funding areas in the first six months of 2014 included:

  • Digital medical devices, which raised $206 million;
  • Analytics and big data, which raised $196 million;
  • Health care consumer engagement, which raised $193 million;
  • Population health management, which raised $162 million; and
  • Personalized medicine, which raised $150 million.

In addition, the average deal size increased from $10 million per deal in 2013 to $15.6 million per deal in the first half of 2014, according to Rock Health Manager Teresa Wang.

According to the report, the top three digital health deals during the first half of 2014 were:

  • $135 million for NantHealth’s interoperability and health IT platform;
  • $130 million in series B funding raised by Flatiron, a data analytics and software company; and
  • $125 million raised by Alignment Healthcare, a population health company.

However, some crowdfunding platforms saw funding drop by nearly 50% since 2013, including:

  • Indiegogo;
  • Kickstarter; and
  • Medstartr.

Reaction

According to Healthcare IT News, the spike in digital health funding has raised concerns among some analysts about a potential bubble in the market.

However, in the report, Wang wrote, “For those concerned about an overall venture bubble — it’s always hard to tell from the inside, but for context, we’re still a ways off from the frothy 1999-2000 period” (McCann, Healthcare IT News, 7/9).

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