Mergers and Acquisitions

VC Funding of Digital Health is Higher than Ever

Global venture capital funding for digital health companies in 2019 increased in quarter one and quarter two relative to last year, reaching $5.1 billion for the first half of 2019, according to a Mercom Capital Group report.

In the first half of 2019, 14 digital health funding deals originated in Texas, raising nearly $162 million for companies in the Lone Star State. Eight acquisitions of Texas digital health companies took place over the same period, according to the report.

Digital health VC investment was slightly higher than last year, totaling $5.1 billion with 318 deals in the first half of the year compared to $4.9 billion and 383 last year. The second quarter saw $3.1 billion in 169 deals and the second quarter had $2 billion raised in 149 deals.

Companies focused on healthcare practices received 40 percent of the funding, while consumer facing companies raised 60 percent. Analytics and telemedicine lead the way, with mobile health apps, wellness, and healthcare booking rounding out the top five areas of investment.

The first half of 2019 saw powerful companies like Apple, Google, Best Buy, Merck, and UnitedHealth Group acquire digital health companies. Since 2010, digital health companies have raised $40 billion in venture funding, with $30 billion in the U.S. to date.

“Funding activity was robust in Digital Health in the first half of 2019, while M&A activity was weak. Weak M&A activity has not affected investment activity over past years. We are in an ‘invest first and ask questions later’ environment where investors are more worried about missing out in this hot space. After a long hiatus, we are seeing several Digital Health companies entering the IPO market in the United States. Successful IPOs could open the floodgates, whereas if IPOs fizzle out, it could shut the IPO exit path for many Digital Health companies,” said Raj Prabhu, CEO of Mercom Capital Group via release.

Learn more about the report from global communications and consulting firm Mercom Capital Group here.



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