VC Funding in Healthcare IT Continues Record Growth in Q2 2013

VC Funding in Healthcare IT Continues Record Growth in Q2 2013
  • Mercom Capital Group, llc, a global communications and consulting firm, has released its report on funding and mergers and acquisitions (M&A) activity in the Healthcare IT sector for the second quarter of 2013.
  • Venture capital (VC) funding in the sector continued its rapid growth in another record quarter with $623 million raised. There were 168 funding deals this quarter compared to 104 the previous quarter and 163 in all of 2012.

“VC funding in Healthcare IT is now on pace to exceed $2 billion in 2013,” commented Raj Prabhu, CEO of Mercom Capital Group. “The government’s initiative to open up healthcare data has been a contributor to the surge in activity and investments in consumer-focused companies as they turn available data into usable applications and services.”

The marked shift of VC money going from practice-focused technologies towards consumer-focused technologies in Q1 has picked up pace this quarter with consumer-focused companies receiving twice the amount of funding ($416 million in 112 deals) compared to practice-focused companies ($207 million in 56 deals).

A total of 161 investors participated in Q2 2013 including accelerators, incubators and crowd-funding platforms compared to 108 different investors in Q1 2013. Eleven investors participated in multiple funding rounds in Q2 2013. Ascension Health Ventures was the most active investor, and participated in three deals. The remaining top investors participated in two deals apiece. They included BlueCross BlueShield Venture Partners, AIB Seed Capital Fund, Cardinal Partners, Enterprise Ireland, Galen Partners, Khosla Ventures, Lemhi Ventures, Milestone Venture Partners, New Enterprise Associates, and SV Angel.

Consumer-focused companies specializing in apps, wearable devices, sensors, remote monitoring, patient engagement, rating/shopping, and social health networks for physician-to-physician, physician-to-patient and patient-to-patient were all prominent this quarter, whereas medical imaging, data analytics and EHR/EMR companies were among the practice-focused technologies that received attention this quarter.

The two disclosed M&A transactions in Q2 2013 included Jawbone, expanding its long line of recognizable wearable devices, which acquired BodyMedia, a maker of wearable health tracking devices, for more than $100 million. The other was Instem, a provider of IT applications to the early development healthcare market, which acquired Logos Holdings, a provider of full-service electronic data capture for clinical research organizations, along with its subsidiaries Logos EDC Solutions and Logos Technologies, for $7.7 million.To learn more about the report, visit: Healthcare IT Q2 2013 Funding and M&A Report.

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