Digital health companies are scooping up investments at a record-breaking rate, according to a recent report by Rock Health.
The report indicates that innovators have garnered $2.3 billion in the first half of 2014 — which tops the entire take in 2013. And there’s still half a year to go.
“The 168 percent year-over-year growth rate is a clear indication that the mHealth market is just starting to take off as medical device companies seek to expand their reach by acquiring digital health innovators, close to 150 of which have raised more than $2 million year from venture capitalists,” reads a new report from EHRintelligence.
“At the end of the first quarter, we were optimistic that 2014 would be another record year for digital health funding,” says Teresa Wang of Rock Health. “What we didn’t expect was that in just six months, 143 companies would have successfully raised $2.3 billion. Not only are there more companies receiving funding, but the average deal sizes are also up to $15.6 million compared to last year’s $10 million.”
Healthcare organizations are eagerly seeking digital tools to help them achieve their strategic and clinical goals, especially since the Affordable Care Act is now implemented. According to the report, that has spurred providers to take more financial risk and accept accountability for the long-term health of populations.
“Healthcare reform is a strong tailwind into the space, underpinning at least four of the top six categories here as the entire industry needs to rethink its business models,” says Teresa Wang of Rock Health.
The biggest eight deals of the year so far make up more than one-third of the money raised.
More information about that, as well as the full Rock Health Midyear Review 2014 slide deck report, is available here.