Healthcare IT sees $1.2 billion in VC funding in 2012

Last year was a banner year for healthcare technology, with $1.2 billion in venture capital funding reported for the sector and diverse fields in healthcare IT showing substantial growth, according to a new report released this week by Austin, Texas-based Mercom Capital Group. 

The report focused on funding and mergers and acquisition activity for healthcare IT in 2012. The $1.2 billion in 163 deals reported for 2012--compared to the $480 million in 49 deals in 2011 and $211 million in 22 deals in 2010--reflects a huge upward turn for M&A in healthcare IT.

"While the focus of funding has been in the health information management category, which covers technologies on the healthcare practice side, there is significant investment and funding going into companies that engage the consumers--like mobile health, telehealth, personal health and social health," Raj Prabhu, managing partner of of Mercom Capital Group, said an announcement. "The HIT sector really took off in 2012; the deal count tripled and number of investments doubled compared to 2011."

The report also showed that the fourth quarter of 2012 saw the "largest number of deals since Mercom started tracking the sector in 2010" and that slightly more funding went toward consumer-centric companies than to companies focusing on health practice-centric technologies.

Rounding out the top 5 VC deals in 2012 were Castlight Health, 23andMe, GoHealth, Kinnser Software and Practice Fusion, companies ranging from genetic consultants to EMRs. Top investors included Connecticut Innovations, Founders Fund, Merck Global Health Innovation fund, Qualcomm and West Health Investment Fund.

New York-based investment bank Berkery Noyes reported earlier this month that healthcare IT M&A transaction volume has increased 21 percent annually since 2010. Healthcare technology accelerator Rock Health, meanwhile, recently reported that digital health funding was up 45 percent in 2012, with technology companies pouring $1.4 billion into digital health companies.

To learn more:
- read the announcement from Mercom Capital
- download the executive summary

Related Articles:
Healthcare IT M&A deals increased in 2012
Digital health funding up 45% in 2012
Report: Digital health firm investments skyrocketing
Digital health investments up 73 percent in 2012
Health IT firms continue to attract venture capital


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