Digital health funding in the third quarter of 2014 nearly doubled over the same period last year, from $946 million to $1.7 billion, according to a new report from StartUp Health, a New York City-based global platform dedicated to helping healthcare entrepreneurs.
Overall, 2014 is shaping up to be another record year for digital health, with $5 billion invested year-to-date, according to the report. So far, 345 companies have raised a total of $5.13 billion, which is 126 percent more than the amount invested in the same period last year.
Although deal volume is lower—111 deals closed in Q3 2014, compared with 156 closed in Q3 2013—investors are putting more money in fewer startups, indicating the market’s gradual maturation. The largest deals year-to-date include Privia Health, Preventice, Proteus Digital Health, NantHealth and Flatiron Health. The Virginia-based Privia Health, which provides practice management tools to independent physician practices, recently secured $400 million in new funding from an investor group led by an affiliate of Goldman Sachs & Co.
Within digital, big data is the subsector that attracted the most investor support, with $1.17 billion invested and 77 deals to date in 2014. Even if companies don’t primarily identify with the subsector, they’re encouraged to show a big data and analytics play to attract investor support, the report found. Other attractive subsectors of note included practice management ($598 million) and patient engagement ($440 million).
What’s more, digital health continues its march into the mainstream as more consumer brands make their way into the industry. Q3 2014 saw 15 acquisitions by companies including Google, Practice Fusion, Cerner and WebMD/Medspace.
