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Summary:

A new report from health startup accelerator Rock Health shows that funders have invested $1.08 billion in digital health startups this year, which already eclipses the $956 million they spent in all of last year.

cash roll

Venture capital support for traditional life sciences companies may be up for debate, but enthusiasm for digital health startups certainly seems to be on the rise.

According to a report out Wednesday from health startup accelerator Rock Health, in the third quarter of this year, VCs invested 70 percent more money in 84 percent more deals than in the same quarter last year.  Those trends are in line with a mid-year funding report released by Rock Health this summer.

The reports say funders have invested $1.08 billion in digital health startups this year, which already eclipses the $956 million they spent in all of last year.  By the third quarter of last year, VCs invested just $626 million in digital health.

The biggest funders of the year, so far, are Aberdare, Founders Fund, Khosla Ventures and New Enterprise Associates. But the report also notes that the field is attracting newcomers – 10 percent are first time health investors, the report said.

The four largest deals this year – which involved Castlight Health, GoHealth, Care.com and Best Doctors – comprise more than 20 percent of the year’s funding and most of the funding rounds were Series A and B, the report said. But interesting startups including Mango Health, pingmd and Meddik have raised smaller seed rounds.

The report comes a week after the Wall Street Journal said that “the health-care industry in general has fallen out of favor with venture capitalists.” While some in the industry say they’ve seen VC interest shift away from biotech and traditional life sciences that require more time and capital, and are subject to more regulation, Rock Health’s report shows that interest in digital health is still strong.

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  1. Actually, investment in Q3 2012 was up about 44% over Q3 2011, not 70%. The 70% refers to total 2012 investment through Q3 over the first three quarters of 2011. The Rock Health slide deck is easily misread. http://mobilehealthmarketnews.com/rock-health-reports-1-08b-in-vc-investment-for-mhealth-through-september/

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