Digital health funding in 2015 matched the record-shattering pace of 2014, according to a new report from Rock Health.
Rather than worry that funding remained flat, the authors point out that 2014's records represented a doubling of funding in previous years.
More than $4.3 billion flooded into the market this year, and they report an increase in late-stage deals. There were 180 merger and acquisition deals this year. Overall, digital health accounted for 7 percent of venture funding in 2015. Rock Health's data only includes U.S. deals of more than $2 million.
Among the findings:
- The average deal size reached a new high at $15.6 million, despite fewer total deals
- The six largest deals of the year totaled nearly $1 billion, representing 17 percent of all 2015 funding
- The top six categories accounted for 51 percent of all digital health funding in 2015, with payer administration ($252 million) entering the rankings for the first time. The other five categories: Healthcare consumer engagement ($613 million), wearables and biosensing ($489), personal health tools and tracking ($407 million), telemedicine ($234) and care coordination ($208 million)
- Five digital health companies went public in 2015, but publicly traded digital health companies did not fare well in a year when the public markets demonstrated strong overall performance
A recent Brookings research paper found that in 2014, VC deals were two and a half times larger than 2009, and the amount invested grew about six times that of five years before.
Rock Health and Mercom Capital Group both reported previously that IPOs had a big impact on growth of digital health funding in the first half of 2015.
To learn more:
- read the report