Record amounts of cash continue to pour into the digital health arena, with the mid year numbers seeing record highs for year-over-year growth, according to a new Rock Healthreport. The explosive growth in digital health funding, however, has some analysts uneasy over a potential bubble in the market.
So far, 2014 has been a big year for digital health startups, with 143 companies raising a whopping $2.3 billion in just six months. This is more cash than companies raised in the entire year of 2013. As Teresa Wang, strategy manager at Rock Health pointed out, the deal sizes are also setting records from last year, pegged at $15.6 million per deal compared to $10 million in 2013.
"For those concerned about an overall venture bubble -- it's always hard to tell from the inside, but for context, we're still a ways off from the frothy 1999-2000 period," she wrote in a summary of the report.
In terms of where the cash is going, Rock Health officials highlighted that the lion's share, some 50 percent of the funding, came from analytics and big data; patient engagement; population health; personalized medicine; payer administration; and digital medical devices. The most notable change from last year was the payer administration arena, which saw 354 percent growth from 2013's $47 million in funding.
Payer administration: $211 million
Digital medical devices: $206 million
Analytics and big data: $196 million
Healthcare consumer engagement: $193 million
Population health management: $162 million
Personalized medicine: $150 million
For funding winners, Rock Health officials cited healthcare billionaire Patrick Soon-Shiong's NantHealth as raising $135 million for its interoperability and health IT platform. In a close second, data analytics and software company Flatiron took home $130 million in Series B funding. Population health company Alignment Healthcare also fared well, raising $125 million.
Other big 2014 funding deals include the $89 million raised by healthcare software company Dadalus Group; $77.5 million raised by single platform software company MedHOK and the $50 million raise by business management software company MINDBODY, according to a Quarter 1 Mercom Capital healthcare IT venture capital report.
"Not all funding is going so swimmingly though," Wang pointed out. As certain as there are winners in the digital health funding space, there are also companies who saw some disappointing numbers. Certain crowd funding platforms, for instance, saw funding plummet almost 50 percent, with the report citing Indiegogo, Medstartr and Kickstarter.