Digital Health: Funding Activity Still On The Rise
By Megan Williams, contributing writer
Separating the hype around digital health from reality can be hard, but some recent news form accelerator StartUp Health and seed fund Rock Health are shedding light on reality.
Their recent, mid-year report on venture funding and transactional data of the digital health sector points toward a continued trend of growth and investment.
Funding Levels Keeping Steady
According to The National Law Review, 2015 started off more slowly than the previous year, but venture funding levels have increased through the second quarter making up for any differences seen with the start of 2014 and maintaining record-breaking growth. Both StartUp Health and Rock Health reported total investment of $2.1 billion using different reporting metrics in the digital health startup area.
However, at this point in 2014, the sector came in $70 million higher according to Rock Health, and $200 million higher by StartUp’s calculations.
IPO Market Going Strong
Fitbit is leading the world of digital health IPOs, with the company going public in the first half of 2015, raising over $1 billion in capital and producing more than $10 billion in market capitalization.
Fitbit came in at the top of the pile raising just under $733 million, the highest for a U.S.-listed tech company in the first half of the year.
The wearable company launched with a price of $20 per share, and gained a 50 percent increase on the first day of trading, closing things out at $30.40. Its market capitalization similarly hurdled over $8 billion within a week.
M&A Records Being Set
Rock Health reported 92 mergers and acquisitions in the first half of 2015 — that’s compared to 95 for all of the previous year. Still, the total disclosed value for the deals was only $2.6 billion, a paltry 13 percent of 2014’s total disclosed amount.
The most notable deal of the year was the $475 million acquisition of MyFitness Pal by Under Armour.
Beyond The Market
The digital health solutions sector is expected to save the healthcare industry $100 billion over the next four years. Read more about that projection here.