The funding concentration trend apparent in RockHealth’s latest survey [TTA 9 July] is not contradicted by latest bits of news:
- PracticeFusion, a free physician, web-based and ad supported EMR, is rumored to be raising $60 million from what Venture Beat last week termed “a New York-based investment firm, not one of the usual (local) Silicon Valley suspects.” Now we can suppose that sources would be silent unless the deal was signed, sealed and delivered. The leaks can also be strategic ones. (PracticeFusion has also introduced PatientFusion, a PHR with added functions of booking appointments and leaving doctor feedback–which puts it squarely in ZocDoc’s increasingly challenged, but extremely well-funded territory. (We advise them to put aside a few dollars for the inevitable MMRGlobal challenge as well.) Having raised $34 million less than one year ago, the funding is clearly going to updating ‘Meaningful Use’ requirements, the patient portal and to be determined growth.
- Chicago-based Caremerge just raised $2.1 million for its mobile apps for coordination of long term care (LTC) between providers, doctors and families. (MedCityNews) It claims to be the first-ever integrated mobile and web solutions provider for this market. It does answer a crying, not-terribly-glamourous need in senior care, and it’s also interesting that two of the key investors are from Poland and Switzerland. But Caremerge has deep roots in GE-land: one of its founders came from GE Healthcare IT Solutions and it’s currently part of the StartUp Health/GE Healthymagination program–which accepts only companies further along in their development for their $250 million fund, and takes a generous slice of equity for advisory services rendered. [TTA 10 Jan, 7 March, 4 April]
- Health tech accelerator Blueprint Health announced its latest class–and they are increasingly not in the earlier pattern of true startups in need of guidance to appeal to angels and VCs. Five of the ten companies already have customers, versus two in the previous class. Is this mission creep? According to an article in Gigaom, their co-founder has said that they are not deliberately looking for more ‘mature’ companies, but are nonetheless accepting them. Of course, early stage companies that have already gotten into the market have a greater chance of success and look better on the record of any accelerator program. Another trend is B2B rules. Only one of the picks is consumer focused (health coaching) and another is engaged in employee wellness rewards adopted by companies.
Are these pointers to the future, at least in the US?
- Nascent maturity and realism in business plans–the horizon narrowing
- The continued collapse of practice EHRs into a few trusted providers [Doctor backlash brewing, TTA 22 Feb]
- With less funding to go around, and with few companies moving from A to B to C rounds, will future investment and development go to those who have already gained traction in customers and previous investment–and somehow got to that stage with the help of angels and crowdfunding?
- Is it the end of the Quantified Self consumer device buzz? These investments, and the past quarter’s, are largely in the surer, more VC-acceptable water of B2B tech.