Expect ‘explosive’ growth in digital health investments

The digital health space is seeing enormous growth. About $2.2 billion was invested in 143 digital health companies during the first six months of 2014, according to a report from Rock Health.

Compared to 2012, more companies received funding and the average deal size increased to $15.6 million from $10 million. The growth represents 168 percent year-over-year growth.

Nearly 50 percent of all funding this year came from six categories: payer administration; digital medical devices; analytics and big data; healthcare consumer engagement; population health management; and personalized medicine. Of these, the most popular category is payer administration, which had 354 percent growth as payers increasingly look to technology for improved solutions and cost savings.

“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,” according to the report.

Despite the success, Rock Health reported that crowdfunding platforms are down 50 percent compared to 2013.

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