StartUp Health Pegs Digital Health Funding At $5.8 Billion For 2015

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StartUp Health has published its 2015 Digital Health funding report, which outlines investment trends and activity in the digital health market over the last several years. The report differs from Rock Health’s widely-read report on the same topic because this analysis includes all publically disclosed funding, while Rock Health only includes deals valued at $2 million or more. As a result, StartUp Health’s funding reports tend to be larger, and offer a more granular perspective on seed and series A funding activities.

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While Rock Health’s analysis concluded that 2015 investment activities kept pace with 2014’s record breaking year, Startup Health measured a significant drop in funding activity year-over-year. 2014 attracted $7 billion in funding for startups, while 2015 only drew $5.8 billion. Deals were also down, with 561 deals closing in 2014 and only 477 deals closing this year. Due to the way Rock Health counts investments, it only included 247 deals in its own report. While Rock Health and StartUp Health differ on their conclusions in this area, the reports concur on most other points.

Patient and consumer engagement tops the charts for most active sector in both Rock Health and StartUp Health’s reports, raising $1.3 billion on its own through 111 individual deals with an average deal size of $12.9 million. Wearables and quantified self solutions also made both lists. Interestingly, StartUp Health makes no mention of telehealth on its list of most active sectors, despite a $50 million round by MDLive and a $63 million round by Doctor on Demand. Rock Health ranks telehealth among its most active segments.

Where StartUp Health’s report shines is in its early and Series A funding analysis. The report says that seed and Series A rounds spread a wide range between $200,000 and $35 million. Lyra Health closed the $35 million Series A in October of this year. Average deal size for these early stage investments was $3.1 million, jumping to $17.5 million for those that make it to their Series B. StartUp Health’s report says that 65 percent of 2015’s total investments came in the form of seed or Series A investment rounds. The report also notes that the average digital health startup takes between 14 and 16 months to get from closing a seed deal to closing its Series A.


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