Venture Capitalists Keep Digital Health Products Flowing
Rate of capital infusion into digital health companies during first half of the year didn't match previous year's, but far outpaced that of healthcare overall.
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Venture capital investment in "digital health" companies grew 12% in the first half of 2013 to $849 million, and the number of deals leaped by 25%, compared to the prior-year period, says a report from health IT incubator firm Rock Health.
The sector's growth rate in dollars was not as torrid as it was in earlier years, and it fell far behind the 38% increase for all types of software. Yet the double-digit increase in venture funding of digital health stood in sharp contrast to the drop in investment in sectors like biotechnology and medical devices, Rock Health reports.
The 90 digital health companies tracked by Rock Health each raised $2 million or more from private investors. Proteus Digital Health, which makes "intelligent" medicine that includes sensor-enabled pills, a biometric sensor patch and smartphone apps, raised $45 million in its second round of funding. Health Catalyst, which sells an advanced type of enterprise data warehouse, received $41 million; Watermark Medical, which offers a home service that helps medical professionals diagnose and treat sleep disorders, got $32 million; NantHealth, which incubates multiple technologies to improve healthcare, received $31 million; and HealthTap, which enables consumers to ask doctors health questions online, raised $24 million.
The areas of digital health that attracted the most venture capital were remote patient monitoring, which received $102 million in 12 deals; hospital administrative software, $79 million in eight deals; analytics/big data, $78 million in seven deals; electronic health record systems, $69 million in eight deals; and mobile apps for wellness activities, $62 million in six deals.
Remote patient monitoring has captured a lot of attention this year mainly because of the rise of mobile apps and devices, said Malay Gandhi, chief strategy officer for Rock Health, in an interview with InformationWeek Healthcare. He cited Sotera Wireless, which makes a vital signs monitor that is strapped to a patient's wrist and transmits signals wirelessly. Whether worn in the hospital or at home, the device provides early warning signs of deterioration in the patient's condition.
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