If you’re looking for an industry of the near future when it comes to investment, look no further than the healthcare IT industry. According to consulting firm Mercom Capital Group LLC, funding and mergers and acquisitions (M&A) activity for the healthcare IT sector (sometimes called “HIT”) has never been more robust.
The report examines the first quarter of 2013.
Venture capital (VC) funding in the HIT sector continued to gain momentum in another record quarter with $493 million raised, Mercom’s report found. There were 104 funding deals in this quarter compared to 51 in the previous quarter.
There were also 42 early stage deals this quarter compared to 14 in Q4 2012.
There are a number of technologies and other factors causing the uptick as well. Electronic health records (EHR) aren’t just a route many healthcare organizations are choosing to take; in many cases, it has been mandated by law. The Affordable Care Act contains a number of provisions directing the U.S. healthcare industry to switch to electronic health records. Medical information data warehousing is a natural complement to electronic health records. Other flourishing industries include telemedicine, or remote diagnostics via high-resolution Internet connections, mobile health apps, wearable technologies that measure vital signs or disease marketers, and outbound communications technologies that remind patients of appointments.
"The trend we began to see last year of VCs investing in consumer-focused companies like mobile health, telehealth, personal health, social health, and scheduling, rating and shopping has become much more pronounced," said Raj Prabhu, CEO at Mercom Capital Group, in a statement announcing the report. "The enormous market opportunity in consumer-focused health has appeared to pique the interest of investors and is likely to continue to grow as witnessed by the surge in VC activity."
The top five venture capital funding deals seen in the first quarter of 2013 included the $41 million raised by Health Catalyst, a provider of healthcare data warehousing. This was followed by $40 million raised by xG Health Solutions, a spinoff of Geisinger Health System that offers population health data analytics and patient and population-focused care management.
NantHealth, a company focused on delivering next-generation care through the use of advanced secure fiber networks, cloud computing and wireless mobile technology, raised $31 million.
Rounding out the Top 5 was Fitbit, a fitness and health tracker company, and One Medical Group, a provider of online primary care services, which both raised $30 million, according to Mercom’s report.
Find the full report here.
Edited by
Braden Becker
