Q3 sees drop in VC health IT funding, but rise in number of deals

The amount venture capital funds in healthcare IT raised in the third quarter of 2014 slowed from the record breaking numbers hit in Q2, but saw a record number of deals.

More than 200 deals were made in Q3 and funding hit $956 million, according to a report from global communications and consulting firm Mercom Capital Group. However, the amount raised is down from Q3, which saw a record breaking $1.8 billion raised with 161 deals.

Since 2010, VC funding in health IT has surpassed $300 million in 1,344 deals, according to the report.

Of the deals made in Q3, mobile health remained at the top for consumer-centric companies; for practice-focused funding, the health information management category received most of the funding.

Mergers and acquisitions currently are at their highest level since 2010--when Mercom began tracking them, according to the report. M&As raised $4.7 billion with 12 disclosed transactions last quarter. In Q2, that number was $2.2 billion in 12 disclosed transactions.

Some of the growth in mergers and acquisitions in health IT may be attributed to requirements from healthcare reforms--including the Affordable Care Act.

In addition, as use of electronic health records by providers and health tracking devices by consumers becomes more ubiquitous, the health industry is gaining a reputation as an emerging sweet spot for technology investors, FierceHealthIT previously reported.

To learn more:
- here's the report's executive summary (.pdf)