The Mercom Capital Group http://www.mercomcapital.com released their report on M&A activity for the Healthcare Information Technology/Digital Health sector for the first quarter of 2017. This is the initial look into how the markets have reacted to the change in administrations particularly with the GOP-led Congress and President Trump’s stated goal of repealing/replacing the Affordable Care Act.
There were a total of 573 companies and investors covered in this report which covers deals of all sizes across the globe. To learn more about the report, go to http://bit.ly/MercomHITQ12017
Venture Capital (VC) funding in the Health IT sector almost doubled quarter-over-quarter coming in at $1.6 billion in 165 deals as compared to $845 million in 159 deals in Q4 2016. VC funding in Q1 2017 was also up compared to Q1 2016 when nearly $1.4 billion was raised in 146 deals.
Total corporate funding in health IT companies including VC, debt and public market financing came to $1.8 billion compared to $1 billion in Q4 2016.
“Digital health funding is off to a fast start this year and there was no visible effects on investments in the sector, at least in the first quarter. Publicly traded digital health companies actually fared much better in Q1 than last year,” commented Raj Prabhu CEO and Co-Founder of Mercom Capital Group.”
Healthcare practice-centric companies received 35 percent of the funding in Q1 2017, raising $574 million in 50 deals compared to $261 million in 42 deals in Q4 2016. Consumer-centric companies received 65 percent of the funding this quarter, bringing in $1 billion in 115 deals compared to $584 million in 117 deals in Q4 2016.
The top funded Healthcare IT/Digital Health Categories in Q1 2017 areas, were appointment booking–$315 million, mobile wireless–$230 million, data analytics–$193 million, population health management–$115 million, telemedicine- $112 million, and social health network–$102 million.
The top health IT categories in Q 2017 consisted of 65 early round deals, including 14 accelerator and incubator deals.
The top VC deals this quarter included $200 million raised by Hudong Feng Technology, 115 million raised by Alignment Healthcare, $100 million raised by PatientsLikeMe, $90 million raised by Nuna, and $85 million raised by PointClickCare.
A total of 306 investors including four accelerators and incubators participated in funding deals in Q1 2017 compared to 340 investors in Q4 2016.
Health IT VC funding deals were spread across 19 countries in Q1 2017. There were 49 M&A transactions in the healthcare IT sector in Q1 2017 as compared to 42 transactions in Q4 2016.
Practice Management Solutions companies were involved in the most M&A transactions with six followed by Apps and Data Analytics with five each and consulting and telemedicine with four apiece.
The top disclosed M&A transactions were the $1.1 billion acquisition of CoverMyMeds by McKesson, Eliza Corporation’s $170 million acquisition from Parthenon Capital Partners by HMS Holdings, Jiff’s $134 million buy of Castlight Health, and HCI Group for $110 million by Tech Mahindra.
Go to http://www.mercomcapital.com/digitalhealthsubscribee for Mercom’s market intelligence reports.