Mercom Capital Group has also been on the trail health IT/digital health investment trends–we last looked at their 2012 report in January— and finds the opposite from the mid-year ‘warm not hot’ RockHealth digital health investment report [TTA 9 July]. They see sizzle in the $1.1 billion invested to date ($623 million in 2nd Quarter alone) in 272 deals done, versus RockHealth’s $849 million. This may all be in the definitions and the composition of companies surveyed–they had commonality on only two of the five leading deals (the leading deal for both was Proteus, the other was Watermark). Mercom is also predicting a bullish $2 billion this year which would double their 2012 market total ($200 million lower than RockHealth’s). They both see a shift from practice-focused to consumer-focused technologies–and the concentration in deals by 11 funders. Executive summary, announcement, FierceHealthIT article.
Related: A sobering article in Wired depicts the ‘series A crunch’ affecting now over-valued Silicon Valley tech startups moving from overly generous angel and private investors to hard-nosed venture capital companies. Part of the problem is, ironically, accelerators, which polish start-up founders’ presentation and business planning skills to the point where they look better than they should to angels, and perhaps get more than they should. Investors are still ‘dabbling in digital health’ (RockHealth’s POV), and that may actually be…healthy. A Fleet Street (or NY Post)-worthy lurid headline: The Screams of Crushed Startups Echo Across Silicon Valley