Venture capital funding for healthcare technology rebounds, investors log $1.6 billion in deals in Q3
(from Healthcare Finance)
VC cash for health IT has hit $3.57 billion in 2015 so far.
"VC funding into healthcare IT companies bounced back this quarter after a slow start this year," said Mercom Capital CEO Raj Prabhu, in a statement.
"Rating, booking and comparison shopping companies had their best fundraising quarter since we began tracking the category," said Prabhu: $728 million in 15 deals. Mobile health companies ranked second with $319 million in 59 deals – apps scored $206 million and wearables got $88 million. Personal health and wellness companies, meanwhile, accounted for $114 million in 17 deals.
On the provider side, practice management companies attracted $72 million across five deals; telehealth companies raised $65 million in 14 deals, and data analytics firms scored $61 million in 14 deals.
The top VC deal this quarted looked overseas: $394 million raised by Guahao, an online portal for patients in China to book appointments with physicians. ZocDoc, another online booking platform raised $130 million. Practo, which created a physician search engine to book appointments and rate providers, raised $90 million. Kareo, which develops cloud-based medical office software for small practices, raised $55.4 million. Grand Rounds, which matches patients with specialists and connects them for second opinions on a medical diagnosis, scored $55 million.
"Consumer-focused health IT companies have continued to grab a larger portion of VC funding but have consistently lagged practice-focused companies in M&A activity," said Prabhu. "This quarter, however, M&A activity increased with 18 consumer-focused transactions, the highest number for these companies in a single quarter. It is a very positive trend if it continues because IPOs have not proven to be a sure path to success for the sector."
On the M&A side, IBM's $1 billion acquisition of Merge Healthcare, maker of imaging technology, was far and away the biggest. Emdeon's $910 million acquisition of payment tool developer Altegra Health was next on the list, follwed by Premier's $400 million buy of CECity, which develops a cloud-based data analytics for performance management.