Venture Funding in Digital Health Sector Up 66% with a Record $14.8 Billion Raised in 2020

Telemedicine shatters funding records with $4.3 billion in 2020

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 sector for 2020.

Get the report here.

Global venture capital (VC) funding in Digital Health, including private equity and corporate VC, came to $14.8 billion in 637 deals, a 66% increase compared to $8.9 billion in 615 deals in 2019.

Total corporate funding for Digital Health - including VC, debt, and public market financing - reached $21.6 billion in 2020.

In 2020, debt and public market financing for Digital Health companies increased 278%, with $6.8 billion raised in 26 deals compared to $1.8 billion in 20 deals in 2019.

Chart: Digital Health VC Funding 2010-2020

77% of Digital Health funding went to U.S. companies in 2020, with $11.5 billion in 429 deals. Chinese companies recorded $1.1 billion in eight deals. Thirty-eight countries recorded Digital Health VC funding activity in 2020.

Since 2010, Digital Health companies have received $59 billion in VC funding in over 5,000 deals and almost $21 billion in debt and public market financing (including IPOs), bringing cumulative investments into the sector to approximately $80 billion.

“COVID-19 supercharged funding activity in digital health in 2020. Ten digital health categories had their best year with record funding amounts. It was also the biggest year for IPOs with six digital health companies raising over $6 billion. We could see a lot more companies going public in 2021 if the current IPO and SPAC boom continues,” commented Raj Prabhu, CEO of Mercom Capital Group. "The pandemic has mainstreamed the consumer side of digital health technologies in less than a year. Digital health products that were a novelty a year or two ago are now a necessity."

Consumer-centric companies brought in $9.6 billion in 2020, up 81% YoY. Practice-centric companies raised $5.3 billion, a 47% increase compared to 2019.

In 2020, Telemedicine was the top VC funded category with $4.3 billion, a 139% YoY increase compared to $1.8 billion in 2019.

Chart: Top VC Funded Digital Health Categories

Other top-funded categories in 2020 included: Data Analytics with $1.8 billion, mHealth Apps with $1.4 billion, Clinical Decision Support with $1.2 billion, Practice Management Solutions with $837 million, Wearable Sensors with $815 million, Wellness with $792 million, Healthcare Booking with $765 million, and Social Health Networks with $500 million.

Chart: Digital Health Top 5 VC Funding Rounds in 2020

A total of 1,694 investors participated in Digital Health deals in 2020.

Chart: Digital Health Top Investors

2020 was the biggest year for IPOs in Digital Health. Six companies went public, raising a total of $6.2 billion: JD Health ($3.5 billion), GoodRx ($1.3 billion), Amwell ($922 million), Accolade ($220 million), NanoX ($165 million), and MindBeacon ($58 million).

There were 184 M&A transactions in 2020 compared to 169 in 2019.

Practice Management Solutions companies led M&A activity with 25 transactions, followed by Telemedicine companies with 23 transactions, mHealth App companies with 19 transactions, and Data Analytic companies with 18 transactions.

Chart: Top Five Digital Health M&A Transactions

736 companies and investors are covered in this 144-page report, with 110 charts, graphs, and tables.

Get the report here.

About Mercom Capital Group

Mercom Capital Group, LLC is a global communications and research firm focused on digital health, cleantech, and financial communications. Visit http://www.mercomcapital.com to signup up for our market intelligence reports.