Startup Health H1 2018 Report: Beijing Leads China’s Digital Health Investment, Zhejiang Debuts on Global Top 10 Non-US Cities List
Recently, Startup Health released its financing and investment report for the first half of 2018. VCBeat (WeChat ID: vcbeat) has compiled the key information to help readers gain a clearer retrospective view of the remarkable developments in the digital health financing and investment landscape during the first half of 2018.
Startup Health is a digital health business incubator based in New York, USA, that has built the world’s largest portfolio of digital health products, with equity stakes or controlling interests in more than 200 companies across five continents, 18 countries, and over 60 cities. Startup Health conducts comprehensive reviews of global digital health financing and investment at two key junctures each year: mid-year and year-end.
In the first half of 2018, a total of 414 financing and investment transactions were completed in the global digital health sector, maintaining an upward trend with a year-on-year increase of nearly 20%. In addition, the value of financing and investment transactions outside the United States exceeded US$100 million for the first time, with a broader geographic distribution across cities. Startup Health predicts that the total financing and investment volume in 2018 is expected to be twice that of the previous year.
In the first half of 2018, although early-stage financing rounds such as seed and Series A remained the predominant transactions in the digital health investment market,BThe proportion of financing rounds is showing an expanding trend. In terms of transaction volume,CLunheDThe scale of this round of financing is even larger than before, setting a new record60record total funding of hundreds of millions of U.S. dollars.
Among the ten key sectors listed by Startup Health, patient empowerment companies attracted the most investment, making patients the end-user group with the second-highest capital attraction capability after healthcare institutions. The most active in the first half of 20188among the top-tier investment firms6Its primary focus is on patient empowerment.
Although the seed round andAThe proportion of Series A financing has decreased, but the average time interval between the first two rounds of funding for digital health startups has shortened.
FinancingTOP10Enterprises have3The company’s headquarters are located in cities outside the United States, namely Toronto, London, and Zhejiang. Notably, Zhejiang has made its debut on the list of top global cities for international investment and financing.
Data indicate that China is the most continuous and well-funded digital health market outside the United States, with Beijing alone attracting more funding than all major U.S. cities combined. Startup Health believes this trend will continue as resource-rich companies such as Ping An enter the digital health sector.
First Half of 2018TOP10Among investors, there are9institutions made investments across multiple financing rounds, among which5Investments from these institutions even span all funding rounds. In fact, a growing number of investors are focusing more on technologies with disruptive power and their inherent growth potential, rather than on deal size.
Annual Funding Snapshot: 2018 Poised to Hit New Highs
2018In the first half of the year, the number of global digital health financing and investment transactions showed an upward trend, with a total of414Compared to transactions in the same period last year,344 entriesgrowth of nearly20%, yesSince2010The half-year with the highest number of transactions since annual capital flow records began.
Global Healthcare Investment and Financing Transaction Value and Volume, 2010–H1 2018. Image source: Startup Health
Monthly Capital Snapshot: February and July are Traditional Troughs for Investment and Financing
Except2017Year5Outside of the month,2018Capital inflows in each month of the first half of the year were stronger than those in the same period of previous years, despite the investment level2Month,7declined as usual in May,2018the first half of the year still maintained21% monthly average increase.
Monthly Investment and Financing Transaction Volume from 2014 to H1 2018. Image source: Startup Health
Capital Turnover Speed: Faster Completion of Early-Stage Financing Rounds
In the first half of 2018, seed rounds andAAverage time interval between funding rounds15.7months, a decrease from previous periods2.5months. Among them, companies in the management workflow sector moved the fastest, completing their first two rounds of financing in just1more than a year, while companies with clinical workflows spend an average of6months to complete early-stage financing.
Statistics on the Time Interval Between Seed and Series A Funding Rounds from 2013 to H1 2018. Image source: Startup Health
Financing Round Structure: Significant Increase in the Proportion of Series B Financing
2018YearFirst Half of the Year，Has consistently accounted for the largest proportion in financing transactionsSeed round andADeclining Share of Financing Rounds5%, the proportion of Series B financing increased significantly by 5%.
2010–2018 H1 Financing Round Structure. Image source: Startup Health
Number of Investment Institutions: Digital Health Is in High Demand
2018First Half of the Year, a Total of754investment firms entered the digital health sector, compared to the same period last year583position. If this upward trend continues through the end of the year, the number of investment institutions will exceed 1,500.
Number of Healthcare Investors and Covered Financing Rounds, 2010–H1 2018 | Image Source: Startup Health
Top 10 Global Deals in Digital Health Investment and Financing
May 2018,GRAILCompleted by$300 Million Series C Funding Round Led by 6 Dimensions Capital, ranking first on the “Top 10 Deals in Digital Health Investment and Financing” list for the second time. In addition, the types of companies on this list are more diversified than in previous years, coveringFrom Insurance to Population Health8sub-sectors.
Image compiled by VCBeat based on the Startup Health report
Top 10 Non-U.S. Digital Health Investment and Financing Deals
As new digital health investment and financing activities continue to emerge in cities outside the United States, Zhejiang has made its debut as a major hub for such funding, second only to Toronto and London.Top 10 Non-USAmong the transactions, 30% also appeared on the TOP global transaction list, competing with investment and financing activities in the United States.
Image compiled by VCBeat based on the Startup Health report
Top 10 U.S. Cities for Investment and Financing
Most cities in the Top 10 U.S. Cities list saw investment and financing transaction volumes that2017remained flat year-over-year, but Boston and Phoenix demonstrated strong growth momentum. In addition, San Francisco, New York, and Boston were the primary drivers in terms of both deal volume and transaction value, with146subsequent transactions and33.2of the transaction volume and total transaction value, respectively, in hundreds of millions of U.S. dollars78% and 81%.
Image compiled by VCBeat based on the Startup Health report
Top 10 Non-U.S. Cities in Investment and Financing
Currently, Beijing remains the center of digital health investment and financing in China, over the past5In 2026, China has40% of transactions occurred in Beijing. However,2018At the beginning of the year, other Chinese cities also began to attract capital attention.
Image compiled by VCBeat based on the Startup Health report
Investment & Financing Spotlight: China
2018In the first half of the year, mainland China experienced20Financing Transactions, Total Transaction Value5.23hundred million U.S. dollars.
Earlier2016Year and2017In [year], the majority of digital health funding transactions took place in Beijing, with an annual average of approximately6hundred million U.S. dollars. And2018In China's investment and financing transactions in the first half of the year, only1.41Hundreds of millions of dollars were invested in Beijing. As the ecosystem of China’s urban clusters continues to improve, substantial capital has begun flowing into cities such as Chengdu, Hangzhou, Zhejiang, Shenzhen, and Guangzhou.
Image compiled by VCBeat based on the Startup Health report
Investment Spotlight: Finland
2018In the first half of 2026, a total of6initiating a financing transaction, wherein5The transaction occurred in Helsinki, with a total transaction amount1700ten thousand US dollars, accounting for self-2013of the total annual funding in Finland since17%。
For a long time,Helsinki is a major hub for investment and financing transactions in Finland, since2016Since [year], an average annual occurrence of9Initiate transaction.2017In 2026, the total investment in Helsinki was4300USD 10,000.
It is worth noting that,2017After the first investment and financing transaction occurred in Tampere in the year,2018occurred successively over the years3transaction.
Image compiled by VCBeat based on the Startup Health report
Most Active Investment Institutions
2018YearFirst Half of the Year, the number of investments completed by leading investment firms has increased compared to the same period last year. Among them,PolarisMaking its debut on the list of most active investors, Greylock Partners returned to the ranking after an absence of nearly four years.
Most Active Investment Firms in H1 2018 and Their Covered Financing Stages. Image compiled by VCBeat based on the Startup Health report.
Subsectors Favored by the Most Active Investment Institutions
Khosla Venturewas the most active investment institution in the first half of 2018, with diversified portfolio allocations7subsectors. Among them, patient empowerment is the subsector that Khosla Ventures is most interested in.
Subsectors Targeted by the Most Active Investors in 2018 | Image compiled by VCBeat based on the Startup Health Report
Most Active Sub-sectors
In the first half of 2018, nearly every sub-sector saw a single transaction exceeding1billion-dollar mega-deals, to the divergence between the average and median transaction values. It is worth noting that, despiteThe largest-scale transactions did not occur inIn the population health sector, but the latter continues to attract large-scale investment, with a median transaction value of2000USD 10,000.
Image compiled by VCBeat based on the Startup Health report
Most Active Applications
Image compiled by VCBeat based on the Startup Health report
Oratel Diagnostics
Application Areas: Diagnosis, Screening
Functional Overview: Oratel Diagnostics is a fertility monitoring tool, itsSaliva testing technology can20Diagnosing endometriosis within minutes can provide pharmaceutical companies with a low-cost, convenient diagnostic solution for endometriosis, thereby facilitating the recruitment of suitable clinical trial participants.
Funding Round: Angel Round
@Point of Care
Application Areas:Clinical Decision Support
Function Overview: @Point of Care is a clinical decision support tool that provides physicians with the knowledge support required for clinical scenarios and enables real-time data sharing between patients and clinicians, thereby improving clinical outcomes.
Funding Round: Angel Round
Most Active End Users
Image compiled by VCBeat based on the Startup Health report
SOLIUS
User: Consumer
Functional Overview:SOLIUSUtilizing advanced light-tech to enhance bodily functions and stimulate the secretion of key hormones and peptides, including vitamins.D, thereby reaching nearly the global population80% of vitamin D-deficient individuals to increase their body's vitamin D levels.
Funding Round: Angel Round
Sanguine
User: Pharmaceutical Company
Functional Overview:Sanguine passedCollaborated with patients to establish a community for interoperable patient data, and leveragedAIAlgorithms accelerate the matching of patients with clinical trials, thereby assisting companies developing precision medicines.
Funding Round: A+
Most Active Specialties
Image compiled by VCBeat based on the Startup Health report
eko.ai
Specialty: Cardiology
Feature Overview: Heart disease is the leading cause of death and disability worldwide. eko.ai utilizes machine learning-based software to replace manual labor and costly hardware devices, enabling effective monitoring of heart disease.
Funding Round: Angel Round
MyPeople Health
Specialty: Oncology
Functional Overview: MyPeople Health is a health management platform that strengthens preventive and proactive health management for corporate employees, thereby helping employers reduce medical cost expenditures and avoid declines in productivity.
Funding Round: Not Disclosed
Most Active Technologies
Image compiled by VCBeat based on the Startup Health report
Indago
Technology: Hardware, Medical Devices
Product Overview: Indago’s ArthroFree is the world’s first fully wireless, minimally invasive arthroscope. It seamlessly integrates into existing workflows, freeing surgeons from the hassles of tangled cables and outdated technology.
Funding Round: Angel Round
Omnia Salud
Technology: Web App
Feature Overview: Omnia Salud is an integrated platform for bookkeeping, scheduling, and electronic medical records (EMR), helping healthcare institutions in Latin America that still rely on paper records transition to digital systems.
Funding Round: Angel Round