Funding for the digital health industry reached US$6.5 bn in more than 300 digital health deals in the first half of 2017, as per the findings of the Startup Health Insights Funding Rankings 2017 Midyear Report. Startup Health analyzes organizations that perform health, wellness, and the delivery of care through sensors, data/analytics, mobile, internet of things (IoT), and 3D printing.
First Half of 2017 Breaks Previous Year Records
According to the report, the funding in 2017 so far has already exceeded previous year’s mark and also the number of new and unique investors dealing especially with digital health. So far, nearly 600 unique investors have poured capital into digital health, which is almost as many as the whole of 2015. In the second quarter of 2017, the funding reached a total valuation of US$3.8 bn, which makes it the quarter with the largest digital health funding ever.
May emerged to be an important month in terms of funding, with US$1.7 bn raked in across 54 different organizations. All the top 10 deals in the first half of 2017 crossed the mark of US$100 mn, which has been recorded as the most deals over $100M in any year. The trends highlighted in the report indicate that companies are receiving funding at every stage.
Average Funding Size Posts Uptick
The greater emphasis is on early stage deals, comprising of Seed and Series A, as they represent nearly 60% of the overall deal activity. Various segments of the global digital health market have witnessed strong Series A investment activity, which is a promising sign for companies operating in big data/analytics, medical devices, wellness, workflow, and personalized health/quantified-self subsectors. There has been a substantial spike in the Series B average; however, the Series C average has remained truncated. Nevertheless, average funding size displayed an upswing.
Investments in digital health are escalating with numerous significant deals in 2017 from Europe, Australia, the U.K., and Asia. In the U.S., the Northeast (Boston and New York) and Bay Area continue to be the frontrunner for digital health funding. Seattle, Denver, Minneapolis/St. Paul, and Austin, on the other hand, are emerging as innovation hubs. Till date, the top 10 investors in 2017 are GV, Khosla Ventures, GE Ventures, Accel Partners, Flare Capital Partners, Temasek Holdings, Sequoia, and Norwest Venture Partners.