Health IT VC Funding Continues to Climb

Oct. 22, 2012
According to research from the Austin, Texas-based consulting firm, Mercom Capital Group, venture capital funding grew in healthcare IT with $194 million going into 37 deals in Q3 2012. This continues an upward trend that has been ongoing for five straight quarters, Mercom notes. Health Information Management (HIM) companies received the most funding as a technology group with $101 million in 20 deals, followed by Mobile Health companies with $39 million in seven deals and Social Health Network companies with $26 million in four deals.

According to research from the Austin, Texas-based consulting firm, Mercom Capital Group, venture capital funding grew in healthcare IT with $194 million going into 37 deals in Q3 2012. This continues an upward trend that has been ongoing for five straight quarters, Mercom notes. Health Information Management (HIM) companies received the most funding as a technology group with $101 million in 20 deals, followed by Mobile Health companies with $39 million in seven deals and Social Health Network companies with $26 million in four deals.

“Funding and M&A activity continues to be strong in the HIT sector this quarter with a healthy number of early-stage deals. 2012 has the potential to be a billion dollar VC funding year for the sector,” Raj Prabhu, managing partner of Mercom Capital Group, said in a statement. “Mobile health and social health network companies had a strong showing this quarter.”

A mobile health company, Telcare, received the most funding this month, getting $25.5 in funding. Telcare uses cellular machine-to-machine technology for diabetes and other chronic illnesses. Connecture, an online health insurance process automation company focused on health insurance exchanges, was next with $20 million raised. Doximity, a professional social network for physicians, raised $17 million.

In addition, there was strong M&A activity in the sector as well, with 37 transactions in Q3 2012 amounting to $3.2 billion, of which only ten transactions disclosed details. Roper Industries acquired Sunquest Information Systems, a provider of diagnostic and laboratory software solutions to healthcare providers, for $1.4 billion in the biggest deal of the quarter.

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