VC funding for health IT in 2013 already almost equal to 2012 total

A new report from Mercom Capital Group reveals that venture capital funding in the healthcare IT sector continued to grow rapidly this quarter, with $623 million raised.

There were 168 funding deals this quarter compared to 104 the previous quarter, and 163 total in 2012 totaling $1.2 billion. At half year mark, VC funding for HIT is nearly equal to all of 2012 the latter figure.

"VC funding in Healthcare IT is now on pace to exceed $2 billion in 2013," Mercom CEO Raj Prabhu said in an announcement. "The government's initiative to open up healthcare data has been a contributor to the surge in activity and investments in consumer-focused companies as they turn available data into usable applications and services."

There was a considerable shift of VC money going from practice-focused technologies toward consumer-focused technologies. Specifically, consumer-focused companies made twice the amount of funding--$416 million in 112 deals--while practice-focused companies made $207 million in 56 deals.

Health information management (HIM) received the most VC funding--$222 million, with mobile health coming in second at $150 million.

The top five money-raising companies? Proteus Digital Health, at $45 million; lifeIMAGE at $35.6 million; Blue Health Intelligence at $35.5 million; WorldOne at $35 million; and Watermark Medical at $32.2 million. Of those, lifeIMAGE, Blue Health Intelligence and WorldOne all focus on the secure sharing of medical data.

The report seems to contrast a recent 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. Overall, the Rock Health report said, digital health startups attracted $849 million in the first half of the year, up 12 percent over the same period a year ago; however, the growth rate during the first six months of last year was 73 percent.

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

Suggested Articles

An assessment looking at 12 health systems that allow patients to download their health records to their smartphones via APIs finds modest uptake.

The National Institutes of Health-led All of Us precision medicine project has enrolled 230,000 participants with another 40,000 people registered.

Hospitals must pursue a deliberate strategy for managing their public image—and a powerful tool for doing so is inpatient clinical data registries.