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Healthtech Funding Reaches $6.5B in Q1 of 2017

The top 10 deals all reached over $100 million in the first half of 2017

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Digital health funding reached $6.5 billion across more than 306 digital health deals in the first half of 2017, according to the recent StartUp Health Insights Funding Rankings 2017 Midyear Report. The report reveals 2017 has already surpassed previous years in overall funding and the number of new and unique investors focused on digital health. In Q2 2017 digital health funding reach a total of $3.8 billion, which marks it as the biggest quarter for digital health funding ever.

The Startup Health insights tracs companies that enable health, wellness and the delivery of care through data / analytics, sensors, mobile, internet-of-things, 3D printing and genomics and personalized medicine.

Other key findings of the report indicate that while May 2017 was an outlier, it continues to be an important month for funding with $1.7 billion being counted across 54 different companies. The top 10 deals all reached over $100 million in the first half of 2017 – which is now tied for the most deals over $100 million in any year. Typically, companies that raise around $10 million have proven their business models and are about to rapidly scale.

Companies are receiving funding at every stage including close to 50 seed investments year to date. Early stage deals (Seed and Series A) make up over 60 percent of total deal activity. Average funding size has continued to trend upwards. Interestingly, the average Series C size has remained truncated while the Series B average has increased substantially.

The digital health market continues to mature, with more Series A deals than Seed deals in the first half of 2017. There have been several market segments that have seen strong Series A investment activity, a promising sign for companies operating in Workflow; Big Data/Analytics; Wellness’; Medical Devices, and Personalized Health/Quantified-Self subsectors.

Mega deals are emerging as a major trend in digital health. Four deals from the first half of 2017 make up the top 11 deals since the researchers began tracking digital health funding in 2010, including two of the biggest deals to date (Outcome Health for $600 million and Grail for $914 million).

Across the US, Bay Area in San Francisco and the Northeast (New York and Boston) continue to be the market leader for digital health funding; however, Minneapolis/St. Paul, Denver, Seattle, and Austin are emerging as innovation hubs. Global investment in digital health is reported as accelerating with several significant deals in 2017 from the United Kingdom, Europe, Asia and Australia.

The top 10 investors of 2017 year to date appear to be GV (7 deals), Khosla Ventures (7 deals), GE Ventures (6 deals), Accel Partners (6 deals), Flare Capital Partners (5 deals), Temasek Holdings (5 deals), Sequoia (5 deals), and Norwest Venture Partners (5 deals). To add to that, this year alone, close to 600 unique investors have put money into digital health – almost as many as all of 2015.

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