Digital Health Funding

Funding of new ideas is as important in health care as it is in any industry in order to create innovation.  A report from Rock Health examines funding of “digital health”.   (Rock Health Report)   Overall $849 million was invested in this category in the first half of 2013, a 12% increase over $757 million in the first six months of 2012.  There were 25% more deals in this time period in 2013, but both the amount and deal number were a pronounced slow down from 2011 to 2012.  Encouragingly, there were a number of B and C rounds, which either indicates confidence in the businesses ability to ultimately be successful or an inability to support growth by organic revenue.  In the first quarter of 2013 software investment in health care was up 38%, digital health up 12%, but medical devices down 29%.  Remote patient monitoring accounted for $102 million in 12 deals in the digital health category, followed by hospital administration at $79 million and 8 deals; analytics with  $78 million and 7 deals, EHRs at $69 million and 8 deals and wellness with $62 million and 6 deals.  The biggest recipients were Proteus at $45 million, Health Catalyst at $41 million and Watermark at $32 million.  California accounted for by far the largest portion of all funding, with Massachusetts a distant second.  Crowdfunding for early phase investing appears to be growing.