Global HIT, digital health VC funding falls 35% in 1st Q 2015: Mercom Capital

Mercom Capital Group, a research and communications group, tracks global VC funding, mergers and acquisitions in the digital health area and notes a distinct slowing of activity, except for mobile health. They tracked $784 million in 142 deals in Q1 2015 compared to $1.2 billion in 134 deals in Q4 2014. Leading are consumer health companies with $437 million in 98 deals, then healthcare practice-centric companies, with $347 million in 44 deals–both dropping over $200 million each versus the previous quarter. Mobile health companies had $282 million in 56 deals; app companies accounted for $220 million. In transactions, mobile health led with $578 million, with UnderArmour’s acquisitions of MyFitnessPal and Endomondo. Since 2010, digital health companies have raised almost $10 billion. Mercom Capital release (the full study will run about $300-500). mHealthIntelligence notes that M&A activity is steadily rising in the healthcare sector. Also iHealthBeat.

Health IT funding bubble seen by veteran investor

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2012/12/crystal-ball.jpg” thumb_width=”120″ /] How is health tech like the 1990s ‘dot-com’-ers? Veteran Silicon Valley investor (HealthTech Capital) and former entrepreneur Anne DeGheest projects a ‘Series B crunch‘ in funding health tech and IT in an interview with The Wall Street Journal’s Venture Capital Dispatch. The key factors: angels and ‘unsophisticated investors’ are pouring money into all sorts of devices, apps and related services in seed and Series A stages just to get on board in a hot sector. When the founders of these companies get to Series B and present to more demanding investors, the lack of a true value proposition and a detailed business plan that answers basic questions leave them standing on, as aptly put, ‘a pier to nowhere’ or as Joe Hage termed it last month, ‘insolvent with a great idea.’

Ms. DeGheest’s view that we are reprising the elements of the ‘dot-com’ bubble is confirmed by the numbers in Rock Health‘s and PwC‘s funding reports throughout 2013:   (more…)