Rock Health‘s 2015 report is revealing in one aspect–that the authors try to put a game face on what is a flat situation in digital health investment for first half. Not even the most optimistic of the digerati expected a lift of 16 percent as we saw in 2014 versus 2013 [TTA 2 July 14], but the 8.7 percent fall off from 2014’s blistering $2.3 billion to $2.1 billion in 2015 year-to-date was unexpected. StartUp Health’s report indicated a slower start to 2015, though slightly less, so the reports correspond. Digital health still is growing faster than software, biotech and medical device.
* The top six categories accounted for 50 percent of investment funding: wearables, analytics, consumer engagement, telemedicine, enterprise wellness, EHR/clinical workflow
* In M&A action, this year’s first half has almost matched 2014’s full year total, but with only 13 percent of the investment. Most are digital health companies acquiring others for small amounts.
* The big money at payer, biopharma and provider companies continues to sit out with little on the dance card.
* IPOs for the first half matched the full year of 2014 with five: Evolent Health, Fitbit, Invitae, MindBody, Teladoc–with market caps totaling $11 billion. Projected IPOs include Jawbone, Proteus smart pills, ZocDoc, Flatiron Health, 23andme, American Well and Welltok.
* Venture capital once again went big with Jawbone, NantHealth, Doctor on Demand, PillPack, HealthCatalyst and Virgin Pulse
* The ‘stuck at B’ trend continued with most funding going in A to B rounds, with little past B and not much from seed to A.