SOURCE: Mercom Capital Group

Mercom Capital Group

April 15, 2014 14:59 ET

Strong Start for Healthcare IT Sector With $858 Million in VC Funding in Q1, Reports Mercom Capital Group

Another Record Quarter for Dollars Raised

AUSTIN, TX--(Marketwired - Apr 15, 2014) - Mercom Capital Group, a global communications and consulting firm, today released its report on funding and mergers and acquisitions (M&A) activity in the Healthcare Information Technology (IT) sector for the first quarter of 2014. Mercom's comprehensive report looks at deals of all sizes in Healthcare IT across the globe.

Venture capital (VC) funding continued at a record pace with $858 million (M) raised in 163 deals, a 154% increase compared to the $337M raised in Q4 2013. This was the highest dollar amount raised by the sector in a single quarter to date.

Figure: "Healthcare IT VC Funding Q1 2014"

"Funding into the Healthcare IT sector continues at an astonishing pace. Venture capital funding in Healthcare IT has reached almost $5 billion (B) in about 1,000 deals since 2010," commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

Healthcare practice-focused technology companies received half of all VC investments in Q1 2014, with $460M in 60 deals, with Practice Management raising $124M in eight deals, Health Information Exchange with $78M in two deals, and Data Analytics with $43M in seven deals.

Consumer-focused companies received $398M in 103 deals, with most going to the Mobile Health category ($198M in 61 deals). Telehealth companies received $79M in 14 deals and Scheduling, Rating & Shopping companies received $66M in six deals

There were 65 early-stage deals under $2M, including 29 accelerator/incubator deals in Q1. Investments going into early-stage deals ( < $2M) were more consumer-focused compared to deals of over $2M, which were going towards practice-focused technology companies.

The Top 5 VC funding deals were the $89M raised by Dedalus Group, the $77.5M raise by MedHOK, MINDBODY's $50M raise, the $41.4M raise by Clarity Software Solutions, and Health Catalyst's $41M raise.

Figure: "Healthcare IT - Top VC Funded Companies in Q1"

There were 188 VC investors and eight accelerators/incubators that participated in Q1 2014. Nineteen investors participated in multiple rounds.

U.S.-based Healthcare IT companies accounted for 87% of all deals. Globally, 15 other countries recorded at least one funding deal.

Within the United States, the Top 5 states for Healthcare IT activity were California, New York, Maryland, Massachusetts, and Florida. San Francisco, New York, Baltimore, San Diego, and Portland led with highest number of deals.

Mergers and acquisitions (M&A) activity in Healthcare IT was at its highest level, totaling 53 transactions compared to 44 transactions in Q4 2013. Health Information Management companies saw the most M&A activity this quarter with 18 transactions, followed by Service Providers with 13, and Mobile Health companies with eight.

Announced debt and public market financing in Healthcare IT amounted to $343M in six deals in Q1 2014, compared to $36M in seven deals in Q4 2013.

Two Healthcare IT IPOs in Q1 2014 raised a combined $304M. Castlight Health brought in $204M through its IPO, and Everyday Health raised $100M in its IPO.

Total corporate funding in the Healthcare IT sector, including VC, accelerator/incubator, debt, and public market financing, in Q1 2014 came in at $1.2B.

To learn more about the report, visit: http://store.mercom.mercomcapital.com/products-page/healthcare-it-reports/hit-q12014-funding-report/

About Mercom Capital Group
Mercom Capital Group is a communications and consulting firm focused on Healthcare IT, cleantech and financial communications. Mercom's consulting division advises companies on new market entry, overall strategic decision-making, and provides custom market intelligence and research. Mercom's communications division helps companies and financial institutions build powerful relationships with media, analysts, local communities and strategic partners. About Mercom: http://www.mercomcapital.com.

Contact Information

  • Media Contact:
    Wendy Prabhu
    Mercom Capital Group
    Tel: 512-215-4452