It was a record-breaking year for global venture capital (VC) funding in digital health, with more than $9.5 billion raised in 698 deals for 2018, according to a report by Mercom Capital Group. The previous record was set last year, with $7.2 billion raised in 778 deals.
“Venture capital funding in digital health hit another high with almost $10 billion raised. Venture capitalists’ love of digital health companies is evident, but Wall Street is not yet convinced as more than 60 percent of publicly-traded digital health stocks traded below the S&P 500 in 2018,” Raj Prabhu, chief executive officer and co-founder of Mercom Capital Group, said in a prepared statement. “Funding deals every year have significantly outpaced (mergers and acquisitions) and IPO activity and exits continue to be a big challenge for digital health companies.”
Mobile health apps were among the highest-funded categories for 2018 with $1.3 billion raised. K-Health, a New York-based technology company, was among several companies apart of the trend. In December, K Health raised $25 million during a Series B funding round for its AI-powered health app that checks symptoms and provides information about a user’s health. In early 2018, the company raised $12.5 million for the platform during a venture funding round.
Highest-funded categories for 2018 also included:
- Data Analytics with $2.1 billion,
- Telemedicine with $1.1 billion
- Mobile wireless technology companies with $847 million
- Clinical decision support with $714 million
- Wearable sensors technology companies with $703 million
The report also stated consumer-centric companies alone brought in $5.2 billion in 447 deals in 2018—a 24 percent rise in value from the $4.2 billion raised in 514 deals in 2017. Practice-centric companies raised about $4.3 billion in 251 deals in 2018, which was a 43 percent increase from the $3 billion raised in 264 deals in 2017.
Total corporate funding for digital health companies, including debt and public market financing, reached $13 billion in 2018, while debt and public market financing for digital health companies raised $3.5 billion in 21 deals in 2018.
In the United States alone, digital health companies raised close to $7 billion in 2018, with the remaining $2.5 billion coming from other countries, according to the report. Since 2010, digital health companies have received $35 billion in VC funding in more than 4,000 deals and almost $12 billion in debt and public market financing.