Mercom Report: Q1 2016 Healthcare IT Investment Reaches $1.4 Billion, Led by Wearables

According to MobilehealthNews, Mercom Capital Group, a global communications and research firm, released its Q1 2016 Healthcare IT Venture Funding Report. Venture capital investment in healthcare IT (including private equity and corporate venture capital) reached $1.4 billion this quarter. This represents a 27% year-over-year increase and a 74% quarter-over-quarter increase from the $1.1 billion recorded in Q4 2015.

Raj Prabhu, CEO and co-founder of Mercom, revealed in a statement: “This year, driven by wearable devices, data analytics companies, and telemedicine firms, first-quarter financing results have been impressive. Data analytics and telemedicine companies, in particular, have achieved milestone successes, with two companies each raising over $1 billion to date. However, fundraising for publicly listed health IT companies continues to underperform.”

Furthermore, consumer-centric companies demonstrated more optimistic financing outcomes than enterprise-centric ones. The former raised $796 million across 97 deals, whereas the latter raised only $569 million through 49 deals. Among venture capital-backed company categories this quarter, wearable device companies led with $260 million in funding, followed by data analytics firms at $197 million, and telemedicine companies at $171 million. Mobile health and consumer health information and education sectors raised $120 million and $100 million, respectively.



The report also disclosed the top three financings in the first quarter: Flatiron ranked first with $175 million, followed by Jawbone with $165 million and Healthline with $95 million. The report further indicated that a total of 318 investors participated in transactions during the first quarter, among whom 27 were involved in multiple deals. For instance, Chicago-based venture capital firms such as Jazz Venture Partners, Jump Capital, Lux Capital, Sequoia Capital, and Social Capital each participated in more than three transactions.



Furthermore, the report also examines financing and merger and acquisition (M&A) activities in the fields of healthcare information technology and internet-based healthcare, tracking a total of 58 transactions, including nine mobile health app companies. Among the largest M&A deals were: Pamplona Capital Management’s acquisition of MedAssets for $2.75 billion; IBM’s acquisition of Truven Health Analytics for $2.6 billion; Allscripts’ acquisition of Netsmart Technologies for $950 million; and Halma’s acquisition of CenTrak for $140 million.

Author: Liu Jianqiu

Editor: Li Simeng

Image source: Mercom Capital Group