SOURCE: Mercom Capital Group, llc

Mercom Capital Group, llc

July 07, 2015 09:00 ET

VC Funding in Healthcare IT Comes in at $1.2 Billion in Q2 2015, Reports Mercom Capital Group

Capital Raised Through IPOs Outpaces VC Funding

AUSTIN, TX--(Marketwired - Jul 7, 2015) - 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 2015. The report covers deals of all sizes globally.

Chart: Healthcare IT VC Funding Q2 2014-Q2 2015

Venture capital (VC) funding in the Health IT / Digital Health sector increased 53 percent QoQ, to $1.2B (billion) in 138 deals compared to $784M (million) in 142 deals in Q1 2015. Debt and public market financing in the sector rose to $1.6B in eight deals including four IPOs, bringing the total corporate funding raised in the sector for Q2 2015 to $2.8B.

VC funding has reached almost $2B in H1 2015 compared to $2.6B during H2 2014.

"In the Healthcare IT sector, companies raised more money through IPOs than venture capital this quarter," commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. "Growth in public market financing is an encouraging sign for companies in this sector; it opens up another avenue for funding and an exit path for investors. That said, out of 14 IPOs since 2012, six have decreased in value over their IPO price as of the end of last quarter."

Healthcare practice-centric companies raised $473M in 41 deals compared to $347M in 44 deals in Q1 2015. The areas with the most funding under this category were Clinical Decision Support companies with $206M, followed by Data Analytics companies with $91M, EHR companies with $26M and Practice Management Solutions companies with $20M.

Consumer-centric companies raised $724M in 97 deals this quarter compared to $437M in 98 deals in Q1 2015. Mobile Health companies brought in $214M in 37 deals compared to $282M in 56 deals last quarter, with mHealth Apps receiving $106M, compared to the $220M raised in Q1 2015. Personal Health/Wellness companies raised $209M in 20 deals followed by Telehealth companies, raising $152M in 18 deals. Rating & Comparison Shopping companies raised $149M in 20 deals.

"This quarter Telehealth, Personal Health/Wellness, and Rating and Comparison Shopping companies all had their best fundraising quarter, while funding into Mobile Health and Apps dropped," further commented Prabhu.

There were 39 early-stage deals under $2M, including six accelerator/incubator deals.

Top VC funding deals in Q1 2015 included $200M raised by NantHealth, $92M raised by Virgin Pulse and $50M each secured by Doctor on Demand, and MDLIVE.

Chart: Healthcare IT Top VC Deals in Q2 2015

A total of 271 investors including two accelerators/incubators participated in Healthcare IT deals this quarter, 29 of which participated in multiple rounds.

Globally, the U.S. and 14 other countries recorded funding deals this quarter.

There were four IPOs, accounting for $1.4B: Fitbit's $841.2M offering, Press Ganey Associates' $256M offering, Evolent Health's $225M offering and MINDBODY with $100.1M. There were 53 M&A transactions (eight disclosed) in the Health IT sector compared to 56 transactions (14 disclosed) in Q1 2015. The largest disclosed M&A transaction was the $500M acquisition of Virtual Radiologic Corporation by MEDNAX.

Chart: Top 5 Disclosed Healthcare IT M&A Transactions in Q2 2015

There are 516 companies and investors covered in this report.

Learn more: http://store.mercom.mercomcapital.com/product/q2-2015-healthcare-it-digital-health-funding-and-ma-report/ 

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: http://www.mercomcapital.com. To get our market intelligence reports, visit: http://mercomcapital.com/market_intelligence.php.