Money is pouring into emerging Minnesota medical companies at a healthy rate. Golden Valley-based Medical Alley Association tallied a total of $227 million
raised during the first half of 2016 by 64 health care companies based in the state. The financing raised during the first two quarters of the year is the highest amount seen for that period since the Golden Valley-based Medical Alley began compiling the data in 2009.
Medical device companies have long been the leaders in attracting capital for startup medical companies in Minnesota. But during the second quarter, digital health companies raised more money than medical technology companies.
“For the first time, more money was invested in digital health than in med tech,” said Shaye Mandle, president and CEO of Medical Alley Association. “There’s a lot of money being invested in digital health companies. And that’s not just in Minnesota, that is certainly a national trend.”
According to Medical Alley’s data, digital health companies raised $93 million in the second quarter and have raised a total of $102 million so far in 2016. That has already eclipsed the total of $70.3 million raised by Minnesota digital health companies for all of 2015.
By contrast, medical device companies raised $74 million during the second quarter, up 32 percent compared to the second quarter of 2015. For the first six months of 2016, medical device financing is still slightly ahead of digital health with a total of $102.9 million for the year.
The total money raised by all companies during the second quarter this year -- $174 million – is up 51 percent from a year ago.
This year’s numbers got a big boost from one large deal. Minneapolis-based startup Bright Health, a digitally focused health insurance provider, announced in early April that it had landed $80 million in Series A financing
. That deal alone accounts for 35 percent the total money raised for the first six months of 2016.
In the second largest deal of 2016, Brooklyn Park-based CVRx Inc., a medical device company, raised $46.5 million
through its latest round of financing.
Other notable deals include St. Paul-based Minnetronix Inc., which drew a $20 million for a minority stake in the company.
Medical Alley’s investment report tracks development capital raised from all sources including angel investors, venture capital and debt financing. Drawing comparisons between previous years and quarters is not always an exact science because Medical Alley researchers continue to revise its tally as they learn of additional deals. But the study remains a solid barometer of the financing climate for medical companies in the state.