Healthcare IT VC funding is on pace to exceed $2B in 2013 according to report on funding and mergers and acquisitions (M&A) activity in the Healthcare IT sector for the second quarter of 2013 by Mercom Capital Group, LLC.
The global communications and consulting firm reported continued torrid growth in another record quarter with $623M in VC funding totaling 168 funding deals this quarter compared to 104 the previous quarter and 163 in all of 2012.
“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,” commented Raj Prabhu, CEO of Mercom Capital Group.
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 ($416M in 112 deals) compared to practice-focused companies ($207M in 56 deals).
The top 5 healthcare IT VC deals in Q2 2013 include:
- Proteus Digital Health, a digital health feedback system provider raised$45M Series F
- lifeIMAGE, a network for securely sharing medical images and related health information, raised $35.6M Series C round.
- Blue Health Intelligence, a healthcare data and analytics company, raised $35.5M. Series B
- WorldOne $35M undisclosed
- Watermark Medical $32.2M Series C
Other key findings include:
- 161 investors participated in Q2 2013 including accelerators,incubators and crowdfunding platforms
- 11 investors participated in multiple funding rounds in Q2 2013
- Ascension Health Ventures was the most active investor with three deals
- The remaining top investors participated in two deals apiece, including: 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 and digital health companies specializing in apps, wearable devices and 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
- M&A activity in the Healthcare IT sector dropped in Q2 2013 with 30 transactions of which only two were disclosed compared to Q1 2013, with 46 M&A transactions of which only five were disclosed.
- Health information Management companies attracted the most acquirers with 14 transactions followed by service providers with seven acquisitions and mobile health with three in Q2 2013.
- 2 disclosed M&A transactions in Q2 2013, included Jawbone, which acquired BodyMedia, for more than $100M and Instem, which acquired Logos Holdings, along with its subsidiaries Logos EDC Solutions and Logos Technologies, for $7.7M.
To learn more about the report, visit: Healthcare IT Q2 2013 Funding and M&A Report.
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