Global health IT and digital health venture capital funding topped £4.2 billion ($5 billion) for the first time in 2016.
According to the US technology market intelligence company Mercom Captial Group, venture capital funding for Healthcare IT, including private equity and corporate venture capital, raised £4.25 billion (US$5.1 billion) in 622 deals in 2016. This was up from £3.8 billion ($4.6 billion) raised in 574 deals in 2015.
Mercom Capital disclosed the figures in its annual report on funding, mergers and acquisition activity for the healthcare IT and digital health sector
Consumer-focused digital health companies accounted for the largest share of investment, bringing in about £2.9 billion ($3.5 billion) in 437 deals in 2016, up from £2.6 billion ($3.1 billion) in 403 deals in 2015.
The top funded areas in 2016 were:
* Mobile apps, with £1.1 billion ($1.3 billion)
* Wearable sensors with £493 million ($592 million)
* Data analytics, with £478 million ($574 million)
* Telemedicine companies with £440 million ($528 million)
* Mobile wireless companies with £190 million ($228 million)
* And the “wellness” sector with £182 million ($218 million)
The majority of digital health VC funding rounds in 2016 were for US companies. However, the two largest deals were for Chinese companies; a medical service app Ping An Good Doctor with a £416 million ($500 million) and video consultations app Chunyu Yisheng, which raised £152 million ($183 million) round.
In addition, Flatiron Health’s raised £146 million ($175 million), Jawbone raised £137.5 million ($165 million), and Meet You raised £126 million ($151 million).
According to the Mercom Capital report the top health IT VC investors in 2016 were Khosla Ventures with seven deals followed by GE Ventures, Social Capital, and BlueCross BlueShield Venture Partners with six deals each.
Merger and acquisitions in the health IT sector in 2016 dropped slightly. Mobile health apps led the pack with 21 transactions; followed by data analytics with 19; practice management solutions with 16 transactions; and telemedicine companies with 12.
In the last five years, 206 companies have made multiple acquisitions led by IMS Health with 12, and CompuGroup Medical and iMedX with ten each, Quality Systems with nine, Emdeon and McKesson with eight each, and athenahealth, GE Healthcare, PracticeMax, and Telus Health with seven each.
The top five disclosed merger and acquisitions transactions in 2016 included:
* Pamplona Capital Management’s acquisition of MedAssets for £2.3 billion ($2.75 billion)
* IBM’s acquisition of Truven Health Analytics for £2.16 billion ($2.6 billion)
* EQT Equity fund’s acquisition of Press Ganey Associates for the £1.95 billion ($2.35 billion)
* Allscripts & GI Partners’ acquisition of Netsmart Technologies for £791 million ($950 million)