Patient experience, personalized medicine, big data analytics garner top digital health investment in record-setting first half of 2016

Early stage investments have already climbed close to $4 billion this year, according to a report published by StartUp Health, which is fostering an ecosystem of emerging companies in the healthcare sector. 
By Jack McCarthy
07:37 AM
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Funding for digital health companies reached new heights in the first half of 2016, totaling $3.9 billion invested in 155 deals for seed and Series A rounds, according to a report by StartUp Health. 

The five leading investment groupings were patient experience with $958 million, wellness with $854 million, personalized medicine with $524 million, big data analytics with $406 million and workflow with $328 million.

"Personalized health has become an explosive winner while patient experience maintains strong and steady growth," the report said.

In 2015 early stage investments for the first half of the year amounted to 3.5 billion, reaching $7 billion for the year. In 2015, $2.9 was invested in the first half, and the year-end total was $6 billion.

[Also: Hospitals rank population health, value-based care, patient experience as top strategic drivers of precision medicine]

Terming these rounds an "early stage ecosystem," the report said there was an almost even amount of seed and series A deals in the first half of 2016, making up nearly 65 percent of all funding rounds, though Series A deals garnered more capital. 

StartUp Health’s report continued, however, that seed round companies are facing the pressures of being new businesses. "Companies receiving seed financing are burdened with proving their model works on little capital, while opportunities for Series A funding remain abundant," the report said.

So far this year, 450 investors have deployed capital to the healthcare sector, with 21 organizations investing in deals.

The $500 billion deal for Chinese patient-scheduling app Ping A Good Doctor, for instance, was the largest of the year so far. Wellness and insurance company Oscar received the second highest investment at $400 million, followed by Human Longevity, a big data and diagnostics firm with $220 investment, Flatiron, a big data and personalized medicine company at $175 million, and Clover, a wellness and insurance provider at $160 million. 

"Oscar has continued to blaze an innovative trail through traditional health insurance as a new generation of mobile- literate, 'young invincible' look for affordable, engaging and simple solutions for their insurance,” the report noted. “Simpler models, successful in their own ways, have followed suit as three of the top deals year to date focused on tech-centered insurance.”

StartUp Health also indicated that a growing number of genome-sequencing companies and medical device makers are attracting funding, as are health-centric startups focusing on consumers ages 50 and older. 
 

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