HIT venture capital funding healthy in 2013
Venture capital (VC) funding in the health IT sector almost doubled in 2013, totaling $2.2 billion in 571 deals compared to $1.2 billion in 163 deals in 2012.
The deal count included 139 accelerator and incubator deals, according to the annual report on funding and mergers and acquistion activity for the health IT sector from Mercom Capital Group. The sector also raised $648 million in debt and public market financings, bringing total corporate funding raised by the sector in 2013 to almost $3 billion. VC funding dropped in Q4 2013 with $337 million in 147 deals compared to $737 million in 151 deals in Q3.
“After record fundraising totals in 2013, healthcare IT companies have now received $4 billion in venture funding since 2010,” said Raj Prabhu, CEO and co-founder of Mercom Capital Group. “Mobile health companies led the way in 2013 as the technology transformation of the healthcare industry continues.”
Overall in 2013, consumer-centric companies raised $1.1 billion. Mobile health companies were the largest recipient of VC funding, raising $564 million. Personal health companies received $198 million and social health companies brought in $166 million.
Practice-centric companies also raised $1.1 billion in 2013. Areas that received the most funding under this category were population health with $179 million, EMR/EHR with $166 million and practice management with $162 million.
The top five VC funded companies in 2013 were: Evolent Health, a population health management services organization that integrates technology, tools and on-the-ground resources to support health systems in executing their population health and care transformation objectives, which raised $100 million; Practice Fusion, a web-based EMR provider, which raised $85 million in two deals; Fitbit, a fitness and health tracker company, which brought in $73 million--also in two deals; MedSynergies, a provider of revenue and performance management solutions to healthcare providers, which raised $65 million; and Proteus Digital Health, a provider of a digital health feedback system, which raised $45 million.
Within the U.S., California led Healthcare IT fundraising with 134 deals followed by New York with 48, Massachusetts with 39, Texas with 29 and Tennessee with 26. A total of 43 states had at least one deal in 2013.
Editor
Editor Beth earned a bachelor’s degree in journalism and master’s in health communication. She has worked in hospital, academic and publishing settings over the past 20 years. Beth joined TriMed in 2005, as editor of CMIO and Clinical Innovation + Technology. When not covering all things related to health IT, she spends time with her husband and three children.