2013 Digital Health Funding Review

Rock Health publishes its year-end funding report for digital health. The results are exciting as digital health companies are now significantly outpacing all other sectors within healthcare when it comes to venture funding. Overall, digital health startups brought in $1.97 billion in VC investment money this year, a record breaker. Funding grew 39 percent over 2012’s levels, and has more than doubled since 2011.

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2013 saw highly concentrated investment activity, as well as M&A activity, in many of digital health’s “over-hyped” markets.

Big Data

Health Catalyst raised a $42 million Series B round to fund the expansion of their footprint in the analytics market. The company now supports the analytics projects of about 100 hospitals within the US.

Population Health

San Francisco-based Evolent Health raised a $100 million series B investment round for a suite of population health and risk management tools being designed to help health systems transition from fee-for-service to ACO reimbursement models.

dbMotion, an Israeli-based population health platform, was acquired by Allscripts for $235 million in cash and considerations.

Digital Medical Devices

Proteus Digital Health, a Redwood City, Cali-based startup closed a Series F financing round that netted the company $45 million, raising its total to $170 million since its 2001 formation. The company is working on a smart pill that is packed with sensors and, when swallowed, is capable of capturing biometric data and transmitting it to a smartphone


Fitbit raised $43 million this year, on a $300 million valuation.

The crowded activity tracker market also saw some consolidation as Jawbone acquired rival activity tracker manufacturer BodyMedia for an undisclosed sum that was reported north of $100 million.


Practice Fusion’s $85 million Series D round was one of the largest of the year, and brought the startup’s total lifetime fundraising to nearly $150 million.

Competing web-based EHR vendor CareCloud raised an impressive $20 million Series B to expand its platform and footprint in the ambulatory marketplace.

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This year also brought a shift in where money was being invested. For the first time, more than 50 percent of deals were for seed or Series A rounds. This suggests that more new digital health companies are starting now than ever before. Strong investment activity in earlier stage companies is a sign that investors have confidence in the digital health marketplace at large.

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