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First-Half Digital Health Funding

By July 6, 2018Commentary

Rock Health tracks the digital health space, whatever that is, and gives us this status report as of the end of 2018.   (Rock Health Report)   Here is my quick version of the digit report.  Here comes pointer, here comes pointer, in the lead, saying “hand over that money”; here comes tallman, here comes tallman (also known as “The Finger”), in second place; here comes ringman, here comes ringman, lagging in third, but wedded to some funding; here comes pinkie, here comes pinkie, nobody  loves a pinko; and bringing up the rear, thumbkin, because you know what they say about thumbs and rears and where some people have their thumbs, like the ones who wrote this report.

Anyway, here are some takeaways, according to the Rock Health crew.  One is that there was $3.4 billion in new capital committed to digital health companies in the first half.  There were 193 financing rounds, with the average size being $17.9 million.  There were four $100 million plus rounds.  There were fewer seed financings, and more B or mid-stage rounds.  The report claims that it isn’t so much that there is too much capital driving valuations and deal size, but increasing evidence of the value of digital health companies.  My response is, remember that alternative name for tallman.  Another learning, the same investors keep beating their heads against the digital wall. Look, if you figured out how to sustain hype for long enough to dump the company on someone else, why not repeat the process.  Ooohh, but a little trouble, exits are “sluggish” as the report puts it.  Maybe those bigger fools aren’t so foolish after all.  And finally, behavioral health companies got a lot of funding, probably because investors have finally figured out that those problems have an impact on overall health and on good management of health and health care.  Doesn’t mean that the companies being funded will have any better record of actually creating better outcomes.  Okay, enjoy your weekend.

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