Venture Capital Funding in Digital Health Sector Reaches $8.9 Billion in 2019

$58 billion has gone into digital health companies since 2010

AUSTIN, Texas--(BUSINESS WIRE)--Mercom Capital Group, LLC, a global communications and research firm, released its annual report on funding and mergers and acquisitions (M&A) activity for the Digital Health / Healthcare Information Technology (IT) sector for 2019. Mercom’s report covers deals of all sizes from around the world.

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Global venture capital (VC) funding in digital health, including private equity and corporate VC, declined in 2019 with $8.9 billion (B) in 615 deals compared to $9.5 B in 698 deals in 2018. Total corporate funding for Digital Health companies - including VC, debt, and public market financing - reached $10.1B in 2019.

In 2019, debt and public market financing for Digital Health companies came to $1.7B in 20 deals in 2019 compared to $3.5B in 21 deals in 2018.

Chart: Digital Health VC Funding

Approximately 67% of Digital Health funding went to U.S. companies in 2019, with $5.9B in 2019 in 426 deals compared to $7B in 420 deals in 2018, a 16% decline in funding year-over-year (YoY). The United Kingdom was second with $853M, followed by China with $663M and France with $372M.

“After three consecutive years of growth, venture deals, and dollars for digital health companies declined in 2019. After a long dry spell, there were four U.S. IPOs, but their performance so far has been underwhelming. M&A activity also declined in 2019. The big winners were telemedicine companies, with a 55% increase in funding YoY while digital health products that were powered by AI, brought in over $2 billion,” said Raj Prabhu, CEO of Mercom Capital Group.

Chart: Digital Health VC Funding 2010-2019

Chart: Top-Funded Digital Health Categories Since 2010

Top funded categories in 2019 included: Telemedicine with $1.8B, Data Analytics with $1.6B, mHealth Apps with $1.2B, Clinical Decision Support with $748M, Mobile Wireless with $556M, and Booking with $537M.

Chart: Top VC Funded Digital Health Categories

Top VC funding rounds: Babylon with $550M, Tencent Trusted Doctors with $250M, Collective Health with $205M, Capsule with $200M, and Tempus with $200M.

Chart: Digital Health – Top VC Funding Rounds

A total of 1,288 investors participated in Digital Health deals in 2019.

The most active VC investors since 2010 were: Khosla Ventures, Sequoia Capital, New Enterprise Associates (NEA), and Merck Global Health Innovation Fund.

Chart: Digital Health Top VC Investors in 2019

There were 169 M&A transactions in 2019 compared to the 223 transactions in 2018. Nineteen companies participated in multiple transactions in 2019.

Chart: Digital Health M&A 2010-2019

mHealth Apps were the most acquired category in 2019 with 27 transactions, followed by Practice Management Solutions with 17, and Telemedicine with 14.

Chart: Top Digital Health M&A transactions

Mercom Capital Group, LLC is a global communications and research firm focused on digital health. Visit: www.mercomcapital.com, signup to get weekly market intelligence reports.