Health IT sees drop in VC funding

Venture capital funding for healthcare technology has dropped so far this year, compared to a record-breaking 2014, according to two newly released reports.

Funding in the industry has dipped by about 35 percent, according to a new assessment from Mercom Capital Group. Last year, health IT saw some of the largest funding numbers to date. Health IT in 2014 brought on more than double the amount it did a year prior, according to a Mercom report published in January.

Part of the reason for the lower funding to date is "an increase in investor focus," which is "a sign of a maturing market," according to a second recently published report from StartUp Health. The industry, according to StartUp, is seeing a more varied investor landscape. What's more, personalized medicine is growing and digital health is increasing globally, that report says.

In the first quarter of 2015, VC funding brought in $784 million in 142 deals, according to Mercom. In contrast, the final quarter of 2014 saw $1.2 billion in funding through 134 deals. Mercom looks at deals of all sizes across the globe for its reports.

"Funding fell across the board with the exception of mobile health, which was the bright spot this quarter" Raj Prabhu, CEO and co-founder of Mercom Capital Group, says in the report. "There was also significant M&A activity in the first quarter for mHealth companies."

Mobile health companies brought in $282 million in 56 deals, according to Mercom. The use of electronic health records by providers and health tracking devices by consumers is giving the industry a reputation as an emerging sweet spot for technology investors, Reuters reported in September.

StartUp's report cites funding for Q1 2014 as 1.5 billion and Q1 2015 at $0.9 billion. That report--which examines seed, venture, corporate venture and private equity funding--calls big data and analytics the top subsector for investing so far this year, with $202 million in funding.

To learn more:
- read the Mercom announcement
- here's the StartUp Health report

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