SOURCE: Mercom Capital Group

Mercom Capital Group

July 18, 2016 10:00 ET

Fueled by International Deals Healthcare IT VC Funding Surges to $1.6 Billion in Q2 2016, Reports Mercom Capital Group

Healthcare IT/Digital Health Funding in 1H 2016 Reaches Almost $3 Billion

AUSTIN, TX--(Marketwired - Jul 18, 2016) - Mercom Capital Group, llc, a global communications and research firm, released its report on funding and mergers and acquisitions (M&A) activity for the Healthcare Information Technology (IT) / Digital Health sector for Q2 2016. Mercom's comprehensive report covers deals of all sizes across the globe.

Full report: http://bit.ly/MercomHITQ22016

Venture capital (VC) funding in the Health IT sector, including private equity and corporate VC, came to $1.6B (billion) in 140 deals in Q2 2016 compared to $1.4B in 146 deals in Q1 2016; up 33 percent YoY. In the first half of 2016, close to $3B has been raised in 286 deals, a 50 percent increase compared to nearly $2B raised during the same period in 2015. 

Chart: Healthcare IT VC Funding Q2 2015 - Q2 2016

"The big reason for the jump in VC funding was record fundraising by Chinese companies. This is the first time since 2010 that Health IT companies in the U.S. have been outraised by other countries," said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. "Investors and companies should start paying close attention to Digital Health markets around the world."

Total corporate funding in the sector (including VC, Debt, Public Market Financing and IPOs) for Q2 2016 totaled $1.7B compared to $1.5B in Q1 2016. There was one IPO by NantHealth for $91M (million).

Healthcare consumer-centric companies raised more than $1.2B in 95 deals while Healthcare practice-centric companies raised $360M in 45 deals.

Top funded areas in Q2 were mHealth apps with $779M, Data Analytics companies with $234M, and Wearables and Sensors with $129M.

Chart: Top Funded Health IT Technologies in Q2 2016

Chart: Top Funded Health IT Technologies in 1H 2016

There were 43 early-stage deals at or below $2 million, including 12 accelerator and incubator deals.

Of the Top 5 VC deals this quarter, three of the companies were based in China (Ping An Good Doctor raised $500M, Chunyu Yisheng secured $183M, and Codoon raised $50M) and the other two in the United States (Centauri Health Solutions secured $50M and Proteus Digital Health raised $50M).

Chart: Top 5 VC Funding Rounds in Q2 2016

A total of 282 investors participated in Healthcare IT deals in Q2 2016.

China topped the Healthcare IT VC list in Q2 2016 bringing in $733M in three deals, but United States funding deals fell by almost 40 percent.

There were 53 M&A transactions (seven disclosed) involving Healthcare IT companies in Q2 2016, compared to 58 transactions (nine disclosed) in Q1 2016. M&A activity was led by Data Analytics, with six deals, Rating and Comparison Shopping and EHR/EMR companies with five deals apiece, Health Information Exchange companies with four, followed by Mobile Health, Telehealth, and Population Management companies with three each.

Chart: Top 5 Healthcare IT M&A Transactions in Q2 2016 By Disclosed Amount
Data Analytics and mHealth Apps had the most M&A transactions in the first half of 2016 with 11 each.

There are a total of 549 companies and investors covered in this report.

Mercom's report does not include bioinformatics or medical device deals.

Full report: http://bit.ly/MercomHITQ22016

About Mercom Capital Group
Mercom Capital Group is a global communications and research firm focused on healthcare information technology, cleantech and financial communications. Mercom advises companies on new market entry, custom market intelligence and strategic decision-making. Visit: www.mercomcapital.com. To get our market intelligence reports, visit: www.mercomcapital.com/market_intelligence.php.