News
Digital Health Continues To Attract Billions In Venture Capital

Digital Health Continues To Attract Billions In Venture Capital

Minneapolis-St. Paul is one of 10 most active markets for 2016

Investors continued to bet heavy on digital health in 2016 as the favorite solution to drive more value out of the $3.2 trillion health care system in the U.S.
 
Two new reports put price tags on that effort and revealed exactly where venture capitalists are placing their money.
 
The first report, from Rock Health, the San Francisco-based digital health venture capital firm, said digital health funding totaled $4.2 billion in 2016 for a record 296 deals. That represents a dip in funding from $4.6 billion in 2015 but an 8.4 percent increase in the number of deals from 273 a year earlier. Rock Health tracks digital health deals in the U.S. that attract $2 million or more in funding.
 
“It may look like digital health’s growth spurt is abating, but it’s important to remember that companies still raised double the amount of dollars compared to just three years ago,” the report said.
 
The five hottest areas of digital health investment last year, according to Rock Health, were:
  • Genomics and gene sequencing with $410 million
  • Analytics and Big Data with $341 million
  • Wearables and biosensing with $312 million
  • Telemedicine with $287 million
  • Digital medical devices with $268 million
 
The second report, from StartUp Health, a New York-based digital health accelerator, said digital health funding jumped to $7.9 billion in 2016 for 585 deals. That’s up from $5.9 billion for 527 deals in 2015. StartUp Health’s figures include international deals and investments of under $2 million.
 
The five hottest areas of digital health investment last year, according to StartUp Health, were:
  • Patient/consumer experience with $2.8 billion
  • Wellness with $1 billion
  • Personalized health/quantified self with $765 million
  • Medical device with $713 million
  • Workflow with $593 million
 
StartUp Health’s report identified the Twin Cities as one of the 10 most active metropolitan areas in the U.S. for digital health investments in 2016. Minneapolis-St. Paul ranked sixth with eight deals worth a total of $216 million last year. In the top spot was the San Francisco market with 116 deals worth a total of $1.5 billion, according to the report.