TTA’s week: KRACK hits Wi-Fi, King’s Fund Leeds, FL telehealth, 3rings expands, CHC last call

 

‘Black Monday’ with Wi-Fi, public key encryption vulnerabilities revealed. The King’s Fund in Leeds in December. Next steps in expanding telehealth state regulations. A tender advance notice. And 3rings introduces proactive ‘Things That Care’.  

LAST CALL for the Connected Health Conference in Boston 25-27 October. Readers still save $100. Click on advert link below.

Tender Alert: advance notice for NHS England/Leeds online consultation system (Initial steps for a giant program)
3rings goes Internet of Things with ‘Things That Care’ (UK) (A UK early stage company takes big steps)
KRACK is wack for Wi-Fi attack-–protocol flaw exposed (Black Monday’s KRACK and ROCA)
Improvements in telehealth reimbursement, interstate coverage urged in Florida (Telehealth ‘parity’ only a start)
The King’s Fund: ‘Sharing health and care records’ Leeds 13 Dec (Interoperability and more)
Counting down to the Connected Health Conference–readers save $100! (More added for next week’s event)

Verily’s million points of health data–easy for them, but for your doctor? StartUp Health’s funding breaks records. And four major tenders on offer in the UK.

Verily’s million points of BYO health data to take to your next doctor visit (Questions about What Would Google Do?)
StartUp Health’s Q3 is an even crazier $9bn YTD (Putting the pedal to the funding metal)
Tender Alerts: Wigan, Salford, NICE (Manchester), Kirklees (Three major tenders here)

A busy few days in health tech includes events in both US and UK, Anywhere with VA, cooling funding, tightening regulation, twisty power, detecting cancer for surgery and movement for disease treatment. And David(stow) staves off the NHS Goliath to keep telehealth in Cornwall.

Rock Health’s Q3 report: funding and mega-deals cool down (Just one of those things)
Proposed rule issued for ‘VA Anywhere to Anywhere’ telehealth cross-state care (True remote Home Telehealth moving forward)
NHS Kernow forced to postpone telehealth end by patient legal action (Follow up to ‘Let me die at home’–a patient from Davidstow takes action)
Tender Alerts: Staffordshire £
70m contract, Yorkshire and The Humber test (One huge, one small tender)
Regulation, safety and sustainable development: three short important updates (Editor Charles reports on new EU regulations)
Detecting cancer faster with a pen and smartphone camera diagnostics (Radical improvements to cancer detection) 
Twist up the power: carbon nanotube yarn as future power generator (Possible advance in powering wearables)
MedStartr Momentum 2017 – coming up 30 Nov! (The place to be for health tech is NYC after Thanksgiving)
BioSensics’ Huntington’s Disease remote monitor gains NIH grant (Uses movement and trending for disease diagnostics and treatment)

Long-term behavioral effects of football at a young age and tracking the hacking, again. And Connected Health Conference reboots in Boston at end of October (see advert below –readers save $100).

Hacking, insider actions 81 percent of healthcare data breaches: Protenus (54 % hacking alone, over 674,000 patients affected)
Connected Health Conference 25-27 October, Boston–save $100! (The largest global conference reboots. See link and information below.)
Youth football playing may contribute to long-term cognitive, behavioral issues: BU study (The result of hundreds of impacts to developing brains)

Of continued interest…

Can Big Pharmas hiring digital execs actually ‘reimagine medicine’? (A very big lift indeed)
The REAL acute care: hurricanes, health tech, and what happens when electricity goes out (It’s Groundhog Day with another hurricane a-coming)
Now EHR data entry 50% of primary care doctors’ workday: AMA, University of WI report (Concurs with other studies)
Want to know effectiveness of telehealth, interoperability? NQF reports take their measure. (Finally some assessment frameworks)
Keeping it cool: LifeinaBox mini fridge for meds goes Indiegogo (Delivery 2018)

Equivocal long term telemonitoring studies released by Telemonitoring NI, U. of Wisconsin (Telehealth, virtual visits not getting results they should)
It’s EPIC: Ehealth Productivity and Innovation in Cornwall and the Isles of Scilly (Innovation from Cornwall to the world)
Can technology meet increasing demand for social care? (N. Somerset UK) (How best to assist those who need our help)
Events: MEDICA App Competition 15 November (DE)–not too late to enter! (Germany’s got Apps)
Events: UK Telehealthcare’s autumn and 2018 MarketPlaces, UK Health Show (Upcoming UKTHC events)

Fitbit unveils Ionic smartwatch earlier than expected. Their ‘Hail Mary’ pass? (Will this save Fitbit?)


The eighth annual Connected Health Conference is presented this year in Boston by the Personal Connected Health Alliance (PCHAlliance) in partnership with Partners Connected Health. This year’s theme is The Connected Life Journey: Shaping Health and Wellness for Every Generation–the future of technology-enabled health, wellness and what innovation means. Join over 2,000 providers, researchers, healthcare executives, and developers for three days of engaging conference activity and exhibits. TTA Readers receive $100 off when you enter CHC17TELE100 at registration. Click on the box above to go to the CHC17 website.


Have a job to fill? Seeking a position? Free listings available to match our Readers with the right opportunities. Email Editor Donna.


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We thank our present and past advertisers and supporters: Tynetec, Eldercare, UK Telehealthcare, NYeC, PCHAlliance, ATA, The King’s Fund, HIMSS, MedStartr, HealthIMPACT, and Parks Associates.

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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine and health tech, worldwide–thoughtfully and from the view of fellow professionals

Subscribe here to receive this Alert as an email on Wednesdays with occasional Weekend Updates. It’s free–and we don’t lend out or sell our list–no spam here!

Donna Cusano, Editor In Chief, donna.cusano@telecareaware.com, @deetelecare

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StartUp Health’s Q3 is an even crazier $9bn YTD

And you thought Q2 was ‘crazy’? There’s no cooling in StartUp Health’s reported digital health funding activity in Q3, which at $9bn is already past 2016’s $8.1bn and is poised to cross the $10bn bar by end of year.

  • Q3 charted $2.5bn in funding, less than Q2 ($3.8bn) but above Q3 2016 ($2.2bn).
  • Series C and D deals led the funding charge at 15 percent of deals, with Series D on average $113 million. It’s an indicator of market maturity, though A rounds were still in the lead at 35 percent and 21 percent in Series B.
  • Deals are bigger than ever at an average $18 million versus $14 million in 2016
  • Half the deals they tracked were in personalized health and patient/consumer experience, a distinct difference from Rock Health’s shift to B2B. Population health held its own.
  • They tracked more mega-deals YTD due to broader category and ex-US. Rock Health’s lead this quarter of 23andMe was only #6 on the list, surpassed by Auris, Peloton, Guardant Health, Outcome Health, and Grail.
  • The Bay Area leads for deals substantially YTD, with NYC, Boston, and Chicago combined still trailing

Remember that StartUp Health takes a wider sample than Rock Health [TTA 3 Oct], tracking over 500 international company deals, including those below $2 million as well as both service and biotech/diagnostic companies. StartUp Health on Slideshare.

Rock Health’s Q3 report: funding and mega-deals cool down

Too hot not to cool down? This year’s digital health funding, as reported by Rock Health, may be ‘just one of those things’ depending on what happens next quarter. After a torrid Q2 which brought first half 2017 to an explosive $3.5 bn [TTA 11 July], Q3 added only $1.2 bn for a total $4.7 bn. Bear in mind that this is larger than the full years of 2014-2016, and that Rock Health tracks only US deals over $2 million in value from venture capital, excluding government and grant funding. Rock Health’s report concentrates on deal sizes, trends, and types of companies. Here’s what this Editor found to be interesting:

Here’s what this Editor found to be interesting:

  • Number of deals is at a record: 268 digital health funding deals across 261 companies. In 2016, 240 digital health venture deals had closed by the end of Q3 in 2016.
  • Few mega-deals this quarter: The only ones are 23andMe with a $250 million round in September followed by cancer data company Tempus’ $70M Series C round. Average deal size dropped to $14.6 million. The cooling is great enough for Rock Health to predict that there may not be any IPOs this year–23andMe was considered the leading candidate but instead went for another round.
  • 16 percent of companies funded in Q3 are led by women CEOs, up from 11 percent. Of course, this is influenced by 23andMe’s founder/CEO Anne Wojcicki. But almost more importantly, there’s been a breakthrough in that women’s and reproductive health companies continue to gain funding traction, and most are led by women.
  • The two top categories for funding through Q3 are consumer: health information and personal health and tracking tools.
  • Yet companies are shifting to a B2B business model from B2C, with 23andMe in the lead targeting drug discovery via the Genentech deal they have had for a long time. 61 percent of digital health startups that Rock Health tracks converted from B2C to B2B. No surprise to this Editor as consumer adoption is a slow and costly road.
  • Exits are also cooling down as long-cycle reality hits. The ‘nine-inning ball game’ stated by an investor is, given healthcare’s long cycles, regulation, and slow adoption, is more like 15. 
  • Some recovery in public companies making money in earnings per share (EPS). Teladoc‘s recovered, while NantHealth continues in the doldrums. (Perhaps it’s Cher suing Patrick Soon-Shiong?)

Awaiting StartUp Health‘s always numerically bigger report, but this Editor’s bet is that it won’t be ‘crazy’ like Q2 [TTA 15 July]. Rock Health Q3 report.

AARP/Rock Health 2017 Aging in Place $50K Challenge–deadline 2 Oct!

One week to go! The 2017 Aging in Place Challenge, sponsored by the AARP Foundation and Rock Health, is calling for digital health companies to improve the lives of vulnerable seniors (their words, not this Editor’s) and reduce unnecessary healthcare utilization for older Americans. The Challenge is interested in four areas:

  • Reducing hospital readmissions
  • Avoiding penalties from providers
  • Providing post-acute care assistance
  • Increasing overall patient satisfaction

Another requirement: competitors should have “a good handle on product-market-fit and an ARR (annual recurring revenue) of at least $100K.”

Apply now through 2 October, with the top five finalists to be announced on November 6. The pitch event will be at Rock Health in San Francisco during the week of December 11th with one winner selected. More information and application link here.

UDG Healthcare buys American, adds Vynamic, Cambridge BioMarketing for up to $67 million

Consultancy acquisitions the latest trend–who’s next? Dublin’s UDG Healthcare acquired Philadelphia-based healthcare consultancy Vynamic last week, then topped it on Monday with marketing/communications company Cambridge BioMarketing. Cambridge has an unusual specialty–campaigns for orphan and specialty drugs and treatments with clients from small to large pharma and biotech. Vynamic, an industry management consultancy, provides services from strategic planning to process design and systems implementation.

This follows on the reveal earlier this month in Bloomberg of the potential sale of The Advisory Board’s healthcare practice to UnitedHealthcare. Last week, this Editor mentioned Evolent Health in Rock Health’s record-breaking review of first half 2017 funding. It turns out that publicly traded Evolent is partly owned by The Advisory Board, with a share valued at $170 million, and reportedly had been seeking funding to itself purchase The Advisory Board, now considered unlikely (BizJournals). What will happen to this share isn’t known.

The Vynamic acquisition is structured as an initial purchase price of $22 million with an additional consideration of up to $10 million payable over the next three years, based on the usual achievement of agreed profit targets, for a total of $32 million (€27.8 million). Irish Times Vynamic will join UDG’s Ashfield Division. Release For Cambridge, it’s a similar arrangement of $30 million (€26m) paid up front, with the potential for an additional $5 million (€4.3m) paid over the next 12 months, again dependent on achieving financial targets. RTE.ieRelease

“Crazy”: StartUp Health’s 2nd Q digital health funding breaks record

As predicted, a torrid start to the year. StartUp Health‘s 2nd quarter and first half funding estimate shattered records–$6.5 billion first half, $3.8 billion 2nd quarter compared to $8 bn and 500+ deals in full year 2016. StartUp Health takes a wider sample than Rock Health, tracking over 300 international company deals, including those below $2 million, in service and biotech/diagnostic companies. A change from last year is that there are more Series A than seed deals, concentrating on workflow, big data/analytics, wellness, medical device, and personalized health-Quantified Self companies. Series B deals are well-populated, but there is still a long bridge to C and above. San Francisco and the Bay Area continue to substantially lead in deals made, with Chicago at 39 percent and New York at 25 percent of deal value. They also trumpet the success of their funding family. Watch the video below or download the free report here.

Q1 digital health investment: two perspectives from StartUp Health and Rock Health

StartUp Health’s and Rock Health’s investment/M&A roundups from Q1 2017 have just hit the deck. Before we dig into them, let’s start with the differences in methodology:

  • Rock Health tracks deals only over $2 million in value; StartUp Health seems to have no minimum or maximum; the latter includes early stage deals at a lower value.
  • StartUp Health gathers in international deals at all levels, whereas Rock Health includes only US-funded ventures.
  • Rock Health omits healthcare services companies (citing Forward, Oscar), biotech/diagnostic companies (GRAIL, Theranos), and software companies not solely focused on healthcare (Zenefits)
  • StartUp Health defines ‘digital health’ differently than Rock Health, with categories of ‘patient/consumer experience’, ‘wellness’, ‘personalized health/quantified self’, and ‘research’

StartUp Health is ‘over the moon’, breathlessly (appropriately as the home of the 25-year Health Moonshot) with Q1 trending, seeing the biggest investment quarter since 2010 at $2.5 bn. Topping up this number was GRAIL, which is developing a blood test for early cancer detection, with a massive Series B at $914 million. Far behind it in the $85-110 million range were (in descending order) Alignment Healthcare (population health), PatientsLikeMe (patient/consumer experience), Nuna (big data/analytics), and PointClickCare (EHR). Population health, patient/consumer experience, and research top their investment activity. Most deals are still seed and Series A (59 percent), but that is down five points from full year 2016; Series B’s share is up three points to 25 percent. But it remains a difficult bridge to cross to C+ rounds.

Rock Health splits the difference and calls it ‘business as usual’, surprised that there hasn’t been a tailspin. Its Q1 sandwiches between 2016 and 2015, well above 2015 but trending 23 percent below Q1 2016. Their biggest deals include the aforementioned Alignment, PatientsLikeMe and Nuna, omitting GRAIL and PointClickCare. Their top three investment categories are analytics/big data, care coordination, and telemedicine (over $50 million). Rock Health tracked almost 20 M&A, noting that many transactions are now ex-California. They also uniquely track public company performance. Here in 2016 is where Readers first noted weakness in NantHealth, but Fitbit and Castlight Health also had miserable quarters. Teladoc, Evolent Health (consulting), and Care.com had a good winter as well. Let’s see what Q2 brings.

Was 2016 a great or off year for digital health funding, M&A, IPOs? (updated)

It depends on the study you read and how jaundiced your view is. If you believe the StartUp Health Insights 2016 ‘Health Moonshots’ report, 2016 digital health funding has hit a zenith of $8.18 bn (up 38 percent from 2015), with 500 companies enjoying funding from over 900 individual investors. Yet over at fellow funder Rock Health, the forecast is far more circumspect. They tracked only half the funding–$4.2 bn in funding–with 296 deals and 451 investors, down from the $4.6 bn over 276 deals in 2015.

There are significant differences in methodology. Rock Health tracks deals only over $2 million in value, while StartUp Health seems to have no minimum or maximum; the latter includes early stage deals at a lower value (their cross-section of ~$1 million deals has 15). StartUp Health gathers in international deals at all levels (pages 11-12),  whereas Rock Health only includes US-funded ventures. Another observation is that StartUp Health defines ‘digital health’ differently than Rock Health, most notably in ‘patient/consumer experience’, ‘wellness’ and ‘personalized health’. This can be seen by comparing their top 10 categories and total funding: (more…)

The growth of telehealth, and the confusion of terminology (US)

Becker’s Health IT and CIO Review has written up a US-centric review of recent advances in telehealth and telemedicine but kicks it off with the confusion level between the two terms. Internationally, and in these pages, they are separate terms; telehealth referring primarily to vital signs remote monitoring, and telemedicine the ‘virtual visit’ between doctor and patient, between two clinical sites, or ‘store and forward’ asynchronous exchange (e.g. teleradiology). Somehow, in US usage, they have been conflated or made interchangeable, with the American Telemedicine Association (ATA) admitting to same, and American Well simply ‘just doing it’ in relabeling what they provide. On top of it, the two are incorporating elements of each into the other. Examples: TytoCare vital signs measurement/recording into American Well’s video visit; Care Innovations Health Harmony also providing video capability.

Of particular interest to our international readers would be the high rate of US growth in telemedicine utilization from 7 to 22 percent (Rock Health survey). Teladoc, the largest and publicly traded provider, passed the milestone of 100,000 monthly visits in November and the ATA estimates 1.25 million from all providers for 2016 (Teladoc release). Other US competitors include the aforementioned American Well, MDLive, and Doctor on Demand, the latter two also selling direct to consumer. They also compete against doctor-on-house call services like Pager and Heal. Reimbursement remains an issue both privately and publicly (Medicare and Medicaid) on a state-by-state level, with telehealth experiencing significant difficulties, as well as internet access, speed, and usage by older adults.

Rock Health announces its Top 50 in digital health (US)

This Editor observes that digital health is at the state of maturity (so to speak) where entities assemble a Top 50 list and host a dinner to pass out awards. Rock Health, Fenwick & West, Goldman Sachs and Square 1 Bank cast a wide net from investment to startups in their just-released list. (Of course there will be a glitzy dinner, soon, at the kickoff of the JP Morgan Healthcare Conference, 9 – 12 January 2017 in San Francisco. Want an invite?)

Of great delight is an award to John Carreyrou of the Wall Street Journal as Reporter of the Year for his investigative work on Theranos. Other highlights are Validic (clinical/wellness data integrator) as Fastest Growing Company, Evolent Health for Best Performing IPO and BSX Technologies‘ LVL hydration monitor as Crowdfunding Hero (having raised $1.1 million when goal was $50,000). Rock Health website

What is increasingly curious to this Editor is that digital health companies, in nearly all cases, aren’t crossing borders and oceans. Every one seems to stick and be unique to its own country of origin, creatures of their own unique petri dish.

Also in other Rock Health news, having evolved a position as a venture fund/business support provider, they have added to their list of prominent partners kidney care and medical group operator DaVita. Rock Health release.

StartUp Health’s midyear report: digital health investment breaks record

The StartUp Health accelerator/investment organization continues with its quarterly analyses of health tech funding. (Rock Health may be at ‘last call’: TTA 11 May) Key points:

  • International investment reached $3.9 bn, a record.
  • There are 7,600 global startups in digital health.

But some things remain the same:

  • Most funding deals go to Series A companies, with seed rounds equal in number but not amount (33 and 32 percent, under $100 million and $400 million respectively).
  • Later stage companies still don’t have ‘legs’. Subsequent rounds after Series B (18 percent) continue to be weak (apparent since the beginning of these tracking reports). Series B now accounts for 18 percent of deals, $600 million in funding. Series C through E drop off precipitously from $400 to well below $100 million.
  • Median on rounds haven’t moved much: $3.9 million Series A and seed, $17 million in B/C, $21 million D and after.
    • Given the regulatory environment and the wisdom of going slow in health tech (poster child–Theranos), this also points to a disconnect between the Silicon Valley mentality of ‘make it quick and exit’ and reality.
  • IPOs have been a mixed picture, with most fluctuating in price and market cap, few making it to their IPO price.
  • International deals range from League in Toronto, Early Sense in Tel Aviv and Ping An Good Doctor in Shanghai, the last of which at $500 million beat the $400 million funding of payer Oscar for top funding honors.

And there are new darlings: patient/consumer experience, wellness, personalized health/Quantified Self (!), big data, workflow and clinical decision support.

An interesting addendum to the report is the 50+Market, which includes companies which are relevant to 50+ needs and those which focus on it. Interestingly, half of investment is residing here and skews heavily towards Series B and later stage companies. StartUp Health page (download). The report for viewing only is on Slideshare.

Is the clock at the funding pub pointing to ‘last call’? (Updated)

click to enlargeAnd we were having such a good time! UPDATED Having ridden a few hype curves (in health tech and out–remember airline deregulation?) and with the bruises to prove it, this Editor believes that she can spot a Cracking Market at forty paces. The hands on the clock appear to be near closing time, even as we party on. After all, DTC telehealth is forecast to be $25 bn in the US by 2025 (GrandView Research), if we make it that far!

Where are the sharp noises coming from?

  • The continuing fail of unicorns like Theranos [TTA 4 May and prior], now resorting to bullying the Wall Street Journal and negotiating with the alphabet (SEC, DOJ, FDA, CMS…), and the troubles of Zenefits. 
  • Another notable unicorn, the doctor booking site ZocDoc, being called out at last on their customer churn, low margins, and high customer acquisition costs. (As well as an irritant to doctors and office managers) New York Business Journal
  • Extremely high and perhaps insane rounds of funding to young companies with a lot of competition or a questionable niche. Higi is an odd little kiosk + consumer engagement program located in primarily Rite Aid drugstores–odd enough to score $40 million in its first venture round. (Ed. note: I shop at Rite Aid–and have never seen one.)This is after the failure of HealthSpot Station, which burned through approximately $43 million through its entire short but showy life. The low-cost, largely exchange plan insurer Oscar Health raised $400 million this February  ($727 million total) while UnitedHealth and others are dropping money-losing plans in most states. Over 50 percent of exchange co-ops went out of business in 2015, leaving doctors, health systems and patients holding their baggage. Again, low margins, high cost and high customer acquisition costs.
  • We’ve previously noted that funders are seeking ‘validation in similarity’–that a few targeted niches are piling up funding, such as doctor appointment setting, sleep trackers and wellness engagement [TTA 30 Dec 15]
  • Tunstall’s continuing difficulty in a sale or additional financing, which influence the UK and EU markets.
  • NEW More patent fights with the aim of draining or knocking out competition. We’re presently seeing it with American Well litigating Teladoc over patent infringement starting last year, which is only now (March) reaching court. It didn’t stop Teladoc’s IPO, but it publicly revealed the cost: $5 million in previously unplanned lobbying and legal costs, which include their fight with the Texas Medical Board on practicing telemedicine–which is beneficial for the entire industry. (But I would not want to be the one in the legal department explaining this budget line.) Politico, scroll down. But these lawsuits have unintended consequences–just ask the no-longer-extant Bosch Healthcare about the price of losing one. (more…)

Rock Health: 1st Q funding deals up nearly 50%, approaches $1bn (US)

click to enlargeFunding’s up, but the digital darlings have changed. The stock market and tech sector may have been uncertain kicking off 2016, but digital health wasn’t. Rock Health’s first report for 2016 exudes optimism. Compared to the same quarter in 2015, funding increased nearly 50 percent to $981.3 million, the highest amount since 2011. But the devil may be in the details:

  • Five deals accounted for 56 percent of the volume (in descending order: Flatiron Health (clinical intel for cancer care), Jawbone, HealthLine (consumer health info), Health Catalyst (data warehousing) and Higi, an odd little kiosk + consumer engagement program nationally placed in Rite Aid stores–odd enough to gain $40 million in its first venture round
  • Seed and Series A raises were still well over half–54 percent, over the 50 percent in 2015
  • Later stage deals (Series D and above) shrank to 13 percent in 2016 from 35 percent
  • Top categories also demonstrated the fickleness of funding favorites. Only two categories in the top six were carry-overs from 2015: wearables (driven by Jawbone) and consumer engagement. New favorites: analytics/big data, population health management, consumer health information and EHR/clinical workflow.
  • There were no venture-backed IPOs in the quarter, and public company performance was down (9 percent y/y)

The new picture favors what to do with the data–finding trends and putting them to use both consumer and clinical sides. And exits were popular as well: 187 was the Rock Health count, with fitness wear Asics‘ acquisition of the Runkeeper fitness wearable and provider One Medical acquiring the Rise app. Will the trend continue in 2nd quarter? Stay tuned….Rock Health Q1 Update

‘VC tourism’ in Health Tech Land is over (updated)

The ‘silly money’ is packing its bags and taking the next flight from the Coast. An exceedingly tart take out of Fast Company confirms what your Editors have noticed in Rock Health and other year-end reports. Funding for digital health may have surpassed $4.2 billion in 2015, but it barely eked over 2014’s total of $2.3 billion despite rising geometrically since 2011 [TTA 16 Dec 15, revised by Rock Health since then]. Since then, we’ve had the Trouble Every Day of ‘unicorns’ (overreaching) Theranos and (ludicrously) Zenefits [TTA 17 Feb]; EHR Practice Fusion stalled out and cutting 25 percent of its staff, hoping to be acquired by athenahealth–or anyone (Healthcare Dive); shaky Fitbit shares [TTA 20 Feb]. Perhaps the high point was last year’s ‘Corvette Summer’ with yet another big round to a company yet to fulfill its promise, ZocDoc [TTA 15 Aug 15]. Even Castlight Health with decent revenue (still at a loss) has been dubbed an ‘absolute horror show’ when it comes to its share prices, if you were foolish enough to buy it at or near its IPO.

Fortunately a large dose of sanity may prevail among VCs with a sobering realization–no different than five or ten years ago–that investment has to be strategic and far longer than the usual 18 month-and-out time frame. Too many companies have systems which work the same niche–you don’t need 50 companies doing these things: data analytics for care management, patient engagement platforms, med reminders or diabetes management. [We’ve already noted the ‘sameness’ in companies getting funded in 2015, almost as if investors were seeking reassurance in similarity, a sure sign of a coming fail–TTA 30 Dec 15.]

Developers must fill a need–uniquely. And have a superb business plan, squeeze the nickels till they squeak and forget about the party culture. Investors: Dumb Money For Digital Health Will Vanish As Quickly As It Came In

 

Rounding up the funding rounds of 2015–and the deals some would like to see (?)

Mobihealthnews rounded up 2015’s hot funding in the mobile health/health tech-related space, with helpful links to their articles. They cite as we have previously [TTA 16 Dec] Rock Health‘s flattish year-to-year 2015 total of $4.3 bn, but also StartUp Health’s bloom-off-rose 2015 digital health total of $5.8 bn–larger than Rock Health’s tote, but 17 percent off their 2014 total of $7 bn. If you consider the proportions: the top 10 deals raised $738 million–$130 million alone to the endlessly funded but yet to take over the world ZocDoc –the roster below $20m remains the longest, which is completely in accord with the lower part of Rock Health’s pyramid of angel-A-B rounds.

Yet Aditi Pai’s detailed summary strikes this Editor as useful in an unanticipated way. There is a certain sameness in the products and services of these companies, as if funders are seeking validation in similarity. ZocDoc, DoctoLib and Vitals–doctor profiles and appointment booking. Sharecare, Welltok, Novu, Noom, AbilTo, SocialWellth, Health Recovery Solutions, Jiff–health and wellness engagement programs/apps, many for corporate programs. Whoop, Sano, Sproutling, TuringSensor, Valencell, Moff and four others–wearables. Hello, Sleepace, Sproutling (baby)–sleep tracking. Klara, SkinVision, Spruce–dermatology apps. Beyond the gloomy forecast for unicorns (Theranos being the Child on the Milk Carton), how many of these corporate wellness programs, sleep trackers and wearables will be around in 2017? Mobihealthnews’ 2015 funding roundup.

MedCityNews takes a lighter-hearted (I think) look at 2016 deals. IBM would buy athenahealth mainly for its EHR and practice management data, plus data aggregator Validic, to beef up Watson; 23andMe, past its two years of troubles after stepping on FDA Superman’s cape, would buy PatientsLikeMe (endangering its community shaped credibility? 23PatientsLikeMe?) and the best–Theranos bought by Boston Heart Diagnostics/Eurofin (EU lab testing giant), which would reduce this unicorn to a pony…but one that might make it. Theranos also made VentureBeat’s list of Likely Carcasses in the Valley of Unicorn Death (to quote the article’s author). Chris Seper’s Deals He’d Like To See.

2015 digital health VC funding flat, consolidations nearly double: Rock Health

Rock Health published yesterday their 2015 annual Digital Health Funding report, and perhaps it is good news that 2015 activity maintained the blazing 2014 total at $4.3 bn. Still, it represents a compound annual growth (CAGR) from 2011-2015 of 30 percent.

Consumer digital health is thriving, with healthcare consumer engagement, personal health tools and tracking accounting for 23 percent of overall funding. Two of the six largest deals were won by consumer-driven genetic companies, 23andMe and Helix.

The one new record was that there were 278 deals across 248 companies, with an record-breaking average deal size of $15.6m. What continued is that the vast majority of funding deals (70 percent) were Series B and below, but C and C+ deals increased slightly.  It was also a big year for exits. M&A activity nearly doubled in volume with 180 deals and $6B in disclosed activity. Their index comprising shares of publicly traded digital health companies was off over 5 percent with two of this year’s IPOs trading lower than their opening prices.

According to the Rock Health newsletter, early-funded companies had a few zombies among them. Rock Health looked at companies up to five years ago, and found that 11 percent they classified as either dead or “zombies” (which have not raised a round in 3+ years). “Most likely to die? A disproportionate number of these zombie companies are in the care coordination, EHR, or clinical workflow space.”

The web page with a link to the full study is here. Unfortunately, the download is not free, but $99.