Mercom Capital Group www.mercomcapital.com reports that VC funding in the Healthcare IT sector is beginning to slow based on data from Mercom’s 2015 Q4 Annual Funding and M&A report. The sector brought in $4.6 billion dollars in 2015, which is slightly lower than the record $4.7 billion in 2014.
“After an incredible run from 2010-2014, VC funding to Health IT companies leveled off last year. We are beginning to see a slowdown in early stage deals, a sign that the sector is beginning to mature. We are also seeing funding trends shift from practice-focused to consumer-focused technologies and products,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
Practice-centric companies raised more than $1.5 billion in 171 deals in 2015. Top funded areas included Data Analytics companies with $294 million, followed by Clinical Decision Support companies with $220 million, and Practice Management Solutions companies with $183 million.
Consumer-centric companies grossed about $3.1 billion in 403 deals, up from $2.3 billion in 436 deals last year. Mobile Health companies raised the most funding with more than $1.1 billion. Most of the funding within the mHealth category went to mHealth Apps with $750 million and Wearables/Sensors with $277 million. Rating and Comparison Shopping companies received more than $1 billion followed by telehealth companies with $468 million.
The top VC funding rounds in 2015 were the Chinese company Guahao’s raise of $394 million, NantHealth’s $200 million round, and ZocDoc’s $130 million raise, followed by Virgin Pulse’s $92 million raise. Practo was next with a $90 million round, Collective Health raised $81 million, and Health Catalyst brought in $70 million.
A total of 909 investors participated in VC funding rounds for Healthcare IT companies in 2015 compared to 732 in 2014. The top VC investors in 2015 were New Enterprise Associates and Rock Health with nine deals each, followed by Merck Global Health Innovation Fund and Venrock with eight deals each.
There were 219 M&A transactions in the Health IT sector in 2015 compared to 220 transactions in 2014, with 27 companies making multiple transactions during the year. Mobile Health Apps had the most M&A transactions with 22 followed by Practice Management Solutions with 18 transactions, Data analytics companies with 17, EHR/EMR companies with 16, and 11 telehealth companies.
In the last five years, 166 companies have made multiple acquisitions including CompuGroup Medical and IMS Health with ten, Quality Systems with nine, Emdeon and iMedx with eight each, and PracticeMax with seven. GE Healthcare, McKesson, Roper Technologies, TELUS HEALTH and the Advisory Board Company each acquired six companies.
To learn more about the report and to view four charts, go to http://bit.ly/MercomHITQ42015. Go to http://mercomcapital.com/market_intelligence.php for copies of Mercom’s popular market intelligence reports.