Digital health tops $4.3 billion in funding in 2015, Rock Health says
When it comes to digital health funding, 2015 matched the record-breaking numbers of 2014 with more than $4.3 billion flowing into the industry, according to a Year in Review Report from Rock Health, a venture fund dedicated to backing digital health initiatives.
The report also saw consumerization in healthcare driving mergers or funding deals. Healthcare consumer engagement tools, personal health tools and tracking categories by themselves accounted for 23 percent of overall funding.
Below is a breakdown of the major categories and findings in the report by Rock Health:
"Dollars and Deals"
Surpassing the $4.3 billion mark put 2015 on pace with last year when it came to total venture funding for digital health companies. They continue to get considerable attention from investors, with 7 percent of all venture funding going to digital health companies and the average size deal reaching a new high of $15.6 million. Another trend in this niche is reflective of an overall healthcare industry trend: the proliferation of personal health tools and tracking products, which showed a whopping 222 percent growth over last year.
From last year to this year, Rock Health data shows investors also kept the momentum going, with 49 firms closing at least three deals a piece if not more. Overall, more investors entered the fray, with 336 venture firms investing in at least one deal. Finally, California-based companies are still the major players, garnering a majority of funding. Specifically, Bay-Area companies racked up 40 percent of overall digital health investments.
[See also: Why hospitals should buy IT startups.]
While men still make up the majority of digital health CEO's, the year-end report shows women set records in 2015. Of the companies funded in 2015, women led twice as many as they did in 2014, with 10 percent of 2015 funded companies headed by women. Moreover, of all companies founded and funded in 2015, 31 percent were led by women.
"Exits and Public Markets"
The number of M&A deals nearly doubled in 2015, with 180 deals totaling more than $6 billion. The average deal was worth $140 million, and five venture-backed digital health companies went public.