AUSTIN, Texas--(BUSINESS WIRE)--Mercom Capital Group, llc, a global communications and consulting firm, released its annual report on funding and merger and acquisition (M&A) activity for the Healthcare Information Technology / Digital Health sector in 2017. Mercom’s comprehensive report covers Digital Health deals of all sizes across the globe.
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Venture capital (VC) funding, including private equity and corporate venture capital, in Digital Heath was record-breaking in 2017 with $7.2 billion (B) raised in 778 deals – a 42 percent increase from 2016’s $5.1B in 622 deals. Total corporate funding – including debt and public market financing – was $8.2B in 2017, up 47 percent from 2016’s $5.6B.
Chart: Healthcare IT VC Funding 2010-2017
U.S. companies raised $4.9B in 2017 with $2.3B coming from other countries.
Since 2010, the sector had $26B in VC funding in 3,450 deals and $8.6B in debt and public market financing (including IPOs), for a total of ~$34B.
Chart: Digital Health VC Funding 2010-2017
“Venture capital funding into Digital Health spiked after plateauing the last couple of years. Artificial intelligence and Data Analytics companies had a breakout year with over a billion dollars raised. Digital Health public companies had a much better 2016 compared to previous years with a majority of stocks outperforming the S&P500. However, a buoyant stock market did not translate into companies going public. For the first time in years, no companies issued an IPO in all of 2017. M&A activity, on the other hand, has been declining slightly over the last few years. Investors do not want to miss out on the sheer size and potential of this growing market, but the exit path for many companies remains elusive,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
Chart: Top-Funded Digital Health Categories Since 2010
Top categories 2017: Data Analytics $1.1B, mHealth Apps $759 million (M), Patient Engagement Solutions $708M, Telemedicine $624M, Appointment Booking $516M, Clinical Decision Support $514M.
Data Analytics was the top funded category driven by $419M to Artificial Intelligence-based analytics.
Categories with substantial year-over-year (YoY) funding growth were Data Analytics, Patient Engagement, Clinical Decision Support, and Appointment Booking companies.
Chart: Top-Funded Digital Health Categories 2017
Top VC deals 2017: Outcome Health $500M, Modernizing Medicine $231M, Hudong Feng Technology $200M, WuXi NextCode $165M, PatientPoint $140M, Alignment Healthcare $115M, Annoroad $105M, PatientsLikeMe $100M.
VC investors increased to 1,288 from 1,115 investors in 2016.
Chart: Top Digital Health VC Investors 2017
Forty-three countries had VC deals in 2017 versus 34 in 2016.
Chart: Digital Health - Top VC Funding 2017
2017 had 203 M&A transactions versus 205 in 2016.
From 2010 to 2017, IMS Health acquired 12 companies, CompuGroup Medical AG 11, iMedX 10, McKesson and Quality Systems nine each, Allscripts, athenahealth, Emdeon, GE Healthcare, Harris Corporation and Philips acquired eight each, PracticeMax acquired seven.
Chart: Digital Health M&A Activity 2010-2017
Notable M&A transactions in 2017: Internet Brands’ $2.8B acquisition of WebMD, Optum’s $1.3B acquisition of Advisory Board Company, McKesson’s $1.1B of CoverMyMeds, Konica Minolta’s $1B acquisition of Ambry Genetics Corporation, Navicure’s of ZirMed for $750M.
Chart: Top Digital Health M&A Transactions 2017
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About Mercom Capital Group
Mercom Capital Group is a global communications and research firm focused on healthcare information technology, cleantech and financial communications. Mercom advises companies on new market entry, custom market intelligence and strategic decision-making. Visit: www.mercomcapital.com. To get our market intelligence reports, visit: http://mercomcapital.us6.list-manage1.com/subscribe?u=8c0079257d563c9d44af32583&id=7231f392b2
