Funding for digital health not slowing

Investment for is expected to double from 2013, according to a new study from StartUp Health
By Diana Manos
03:07 PM
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Funding for digital health is expected to be almost double what it was in 2013, according to a new study from StartUp Health. And that growth shows no signs of slowing down anytime soon.

The study found 347 companies raised $5 billion through the third quarter of 2014. In all of 2013, $2.8 billion was raised for digital health.

The topic of digital health in the doctor's office will take center stage at this year's mHealth Summit with a panel discussion on Tuesday, Dec. 9. Moderated by StartUp Health's co-founder and president, Unity Stoakes, the panel features three entrepreneurs: Accel Diagnostics, a provider of in-home lab tests; Cohero Health, the developer of a connected children's asthma inhaler; and @Point of Care, the developer of a point-of-care diagnostics tool integrated with Watson.

According to Stoakes, whose company has been tracking digitial health investments since 2010, this latest study offered some interesting trends on the state of the industry:

  • Deal sizes have increased. Investment size continues to climb as the market matures and more private equity firms pour capital into the sector. As startups raise more cash, speculation is also building about the next wave of initial public offerings.
  • Mergers and acquisitions are picking up. Even though summer activity tends to be slow, the third quarter saw 15 acquisitions by companies including Google, Practice Fusion, Cerner and WebMD/Medscape.
  • The Affordable Care Act is spurring innovation. Healthcare reform continues to drive changes in the industry and encourages startup activity in the sector.
  • Consumerism is growing. As a result of high-deductible insurance plans, price transparency and new technology solutions, patients are becoming more empowered. Brands like Apple, Facebook and Google are now moving into healthcare.
  • Privacy concerns are increasing. Keeping health data safe in the cloud is becoming more top-of-mind for consumers and companies.
  • Wearables are moving into the mainstream. The debut of the Apple Watch, Basis Peak, Moto 360 and Samsung Gear Live show that wearables are clearly moving closer to the mainstream.
  • Global innovation is accelerating. More than 5,000 startups around the world are developing new solutions in digital health, based on data from the StartUp Health Network.

Stoakes says StartUp Health's goal is to help launch 1,000 digital health companies over the next 10 years. It currently has 85 companies in its portfolio, from 45 cities and seven countries. The leaders of these entrepreneurial companies gather together quarterly to share findings from the field.

The mHealth Summit 2014 runs from Dec. 7-11 at the Gaylord National Resort and Convention Center just outside Washington, D.C. Register here.

This story originally appeared on Healthcare IT News sister site mHealth News.

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