VC Investments In Health IT Jump 27% - InformationWeek
Healthcare // Electronic Health Records
03:18 PM

VC Investments In Health IT Jump 27%

While overall investments in healthcare declined, venture capitalists are increasing their bets on health IT.

17 Leading EHR Vendors
(click image for larger view)
Slideshow: 17 Leading EHR Vendors
Venture capital investments in medical software and information services increased in the second quarter of 2011 to $198 million, a 27% increase from the $156 million invested during the same period in 2010, according to research from Dow Jones VentureSource. Additionally, second quarter figures reveal that there was a total of 19 deals, which was a 58% increase in deal activity compared to last year.

"Within medical software and information services the two areas that are getting the most attention and financing are clinical decision support and healthcare administration tools," Jessica Canning, global research director for Dow Jones VentureSource, told InformationWeek Healthcare.

Canning said much of the venture capital investments in software and services for healthcare have been driven by the federal government's health IT investments and incentive programs that have accelerated the adoption of health-related technology.

"This is an emerging sector that is getting increasingly exciting. In the second quarter, those healthcare IT deals raised $198 million, which brings the total venture investment so far to $245 million this year," Canning said. "We are looking to be up compared to 2010 when there was only about $486 million in all of 2010 and again up from 2009 when there was venture investments totaling $394 million for that year. The sector as a whole does seem to have some pretty nice traction year over year and is building up."

While health IT investments are gaining ground and proving to be vital to a hospital's goal of achieving greater revenue growth, the Dow Jones figures showed that overall investments in the healthcare sector declined in the second quarter. The numbers, released late last week, revealed that deals for healthcare companies slowed 12% and capital invested dropped 17% as 184 deals raised $2.3 billion in the most recent quarter, versus last year's second quarter figures when 209 deals raised $2.8 billion.

Despite a 25% drop in deal activity and 7% drop in capital invested, the biopharmaceuticals sector raised the most capital of any healthcare sector as 69 deals collected $1 billion. The medical devices sector was essentially flat as 84 deals raised $925 million. The healthcare services sector attracted the least amount of venture investment with 12 deals totaling $126 million.

Find out how health IT leaders are dealing with the industry's pain points, from allowing unfettered patient data access to sharing electronic records. Also in the new, all-digital issue of InformationWeek Healthcare: There needs to be better e-communication between technologists and clinicians. Download the issue now. (Free registration required.)

Comment  | 
Print  | 
More Insights
Threaded  |  Newest First  |  Oldest First
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of November 6, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll