- Health IT and digital health had strong VC funding in the first quarter of 2017 with $1.6 billion. The first full quarter under the new administration was the second highest quarter ever for the digital health sector, according to the latest Mercom Capital report.
VC funding in the health IT sector in Q1 2017 nearly doubled over VC funding in Q4 2016. While Q1 2017 saw $1.6 billion in 165 deals, Q4 2016 saw 159 deals with only $845 million in funding. Q1 2017 also saw some growth when compared to Q1 2016, which raised $1.4 billion in 146 deals.
Source: Mercom Capital Group
Report authors stated that VC funding in healthcare IT has crossed $20 billion since 2010.
“Digital Health funding is off to a fast start this year and there was no visible ‘Trump effect’ on investments in the sector, at least in the first quarter, and publicly-traded Digital Health companies actually fared much better in Q1 than last year,” Mercom Capital Group CEO and Co-Founder Raj Prabhu said in a statement.
Healthcare practice-centric companies received 35 percent of the total health IT funding in Q1 2017, raising $574 million in 50 deals. Consumer-centric companies received 65 percent of the funding this quarter with $1 billion in 115 deals.
The top funded health IT technology for Q1 2017 was booking, followed by mobile wireless, data analytics, population health management, telemedicine, and social heath network.
Source: Mercom Capital Group
Healthcare organizations are seeking to better engage patients and streamline the booking process. Booking received $315 million in VC funding this quarter.
Mobile wireless received $230 million in Q1 2017 as more healthcare organizations are mobilizing their workforces. The demand for mobility continues to grow year over year as clinicians adapt to using mobile tools to improve workflow and deliver better patient care.
Wireless networks are also a vital piece of health IT infrastructure, allowing mobile devices to quickly and securely communicate with the network. Internet of Things (IoT) devices are also growing in health IT and require extended bandwidth to deal with the influx of traffic due to the high number of connected devices.
Data analytics also saw a significant amount of VC funding this quarter with $193 million. Data analytics is becoming a more important part of health IT infrastructure as organizations begin to require tools to sort through unstructured data.
Healthcare organizations are faced with repositories of unstructured data that can be used for clinical research to help clinicians better understand patient symptoms and conditions. As the IoT brings more data into the repository, deploying tools that can analyze, categorize, and present unstructured data are becoming necessary for many organizations.
Along with data analytics, population health management also received VC funding with $115 million this quarter. Organizations are continuing to use health IT to improve patient care by aggregating patient data across multiple resources, analyzing the data, and presenting it in a single actionable record.
Investors were also interested in telemedicine with the technology pulling in $112 million in Q1 2017. New innovations in telemedicine technology make it a viable future option for patients in remote areas who cannot travel to their provider as often as needed. Telemedicine can also allow patients to keep their primary care physician if the patients move, and keep hospital visits down, saving organizations money.
The technology VCs invested in in Q1 2017 is consistent with current healthcare infrastructure technology trends. Healthcare organizations are looking to health IT to increase workflow and improve patient care. By creating a more efficient health IT infrastructure environment organizations can cut back on overall costs while delivering better care.