According to Mercom Capital Group, venture funding for health IT in the first half of this year was $1.12 billion, a 65 percent increase over the amount invested in the same period last year. And it’s almost already hit the total amount VCs invested in all of last year ($1.2 billion, according to Mercom).
Separately, CBInsights reported this week that investors have poured $998 million into digital health deals in the first half of this year, a 52 percent increase over the amount they say was invested in 2012.
The reports come on the heels of another mid-year funding update from health tech accelerator Rock Health showing that venture capital funding has climbed just 12 percent this year, to $849 million. While both Rock Health and Mercom’s data indicate a decline in the growth rate – Rock Heath reported 73 percent growth this time last year and Mercom reported a 570 percent rise – this week’s reports suggest that venture capital investments in health technology are coming in at a slightly stronger clip than the accelerator reported previously.
To be sure, we’re only looking at data across three years here, so it’s premature to make generalizations about broad investment trends. But given the number of new health startups, it’s valuable to compare the various windows on the funding landscape in health technology.
The numbers vary because the reports consider different kinds of deals — Rock Health, for example, doesn’t include deals under $2 million, while Mercom and CBInsights count deals of all sizes, from seed stage deals on up. And, given its newness, “digital health” is defined differently by different groups. While Mercom includes what it considers to be digital health deals in its report, it says it’s casting a wider net to cover the broader field of “health IT,” which involves using information-sharing and -analysis technologies to improve patient care, reduce costs and improve efficiency. But others would say that health IT is actually a part of digital health, which includes genomics, newer consumer-facing applications and wireless sensors and devices.
Interestingly, while Rock Health noted a “dearth of seed funding” and few angel investors, CBInsights actually reports that an uptick in deal activity has been driven by deals that are mostly at the seed/angel and Series A stages. On top of that, another report specifically on angel investing from CBInsights, Silicon Valley Bank and the Angel Resource Institute found that angels are increasingly interested in healthcare. In the first quarter of this year, angel investments in healthcare climbed 23 percent over the same period last year.
According to data from New York-based startup academy Startup Health, in June alone, 55 companies raised $242 million in funding, which is about 40 percent higher than the amount invested by venture capitalists in the same period last year.
Here’s a quick snapshot of June venture capital activity, from Startup Health: