Health IT VC funding in first quarter tops 2011 total

Health IT companies raised a record $493 million in venture capital during the first quarter of 2013, with 104 deals completed, according to a new report released this week by Mercom Capital Group.

That compares with 51 deals in the previous quarter, according to Mercom. Early-stage investment was up as well, with 42 deals reported, compared with 14 in Q4 2012.

"The trend we began to see last year of VCs investing in consumer-focused companies like mobile health, telehealth, personal health … rating and shopping has become much more pronounced," Raj Prabhu, CEO of Mercom Capital Group, said in an announcement.

Those 59 deals for consumer-focused technologies compared with 45 deals for health practice-focused technologies, according to Mercom.

Health information management companies received $219 million in 44 deals. Of those, six deals were for electronic medical record and electronic health record companies; five were for practice management companies; and three were for business and clinical intelligence companies. Meanwhile, health information exchange and clinical decision support netted two deals each. Mobile landed $127 million in 28 deals.

Health Catalyst, a provider of healthcare data warehousing, led the top five deals by landing $41 million, followed by $40 million raised by xG Health Solutions, a spinoff of Geisinger Health System that offers population health data analytics and population-focused care management. NantHealth, which focuses on advancing care through secure fiber networks, cloud computing and wireless mobile technology, raised $31 million. Fitness and health tracker Fitbit and One Medical Group, a provider of online primary care services, each raised $30 million.

Mercom reported that $1.2 billion in healthcare IT venture funding took place in 163 deals during 2012. That compares with $480 million in 49 deals during 2011 and $211 million in 22 deals in 2010.

Separately, mergers and acquisitions in healthcare IT also rose last year, according to a report from New York-based investment bank Berkery Noyes.

To learn more:
- find the announcement
- here's the report (.pdf)