Healthcare IT VC funding doubles to $2.2 billion

Last year was another banner year for venture capital funding for healthcare IT--it doubled from $1.2 billion to $2.2 billion, according to a new report from Mercom Capital Group.

Overall, the number of VC health IT deals more than tripled from 163 in 2012 to 571 in 2013. What's more, the number of investors active in funding rounds for healthcare IT companies nearly doubled, from 236 in 2012 to 466 last year.

"After record fundraising totals in 2013, healthcare IT companies have now received $4 billion in venture funding since 2010," Mercom CEO Raj Prabhu said in an announcement. "Mobile health companies led the way in 2013 as the technology transformation of the healthcare industry continues."

Indeed, mobile health companies were the biggest recipients of VC funding, raising $564 million in total. Other notable categories of funding included:

  • Personal health companies, which raised $198 million
  • Social media companies, which raised $166 million
  • Practice-centric companies, which raised $1.1 billion
  • Population health companies, which raised $179 million
  • Electronic health record companies, which raised $166 million
  • Practice-management companies, which raised $162 million

The top five companies that received the most VC funding in 2013 were: Evolent Health, a population health management system; web-based EHR vendor Practice Fusion; health tracking company Fitbit; MedSynergies, a performance management solution for healthcare companies; and Digital Health, a "digital health feedback system."

California boasted the highest amount of health IT fundraising, followed by New York, Massachusetts, Texas and Tennessee.

In July it was reported that at the half year mark, VC funding was nearly equal to the 2012 total. The report seems to contrast a July report by health accelerator Rock Health, which said that while investment in digital health startups is growing, it's not at the same torrid pace as a year ago.

To learn more:
- read the announcement from Mercom Capital
- here's the report's executive summary (.pdf)