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2012: A Strong Year for Digital Health Funding

January 9, 2013
by Gabriel Perna
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It’s a good time to be a digital health startup.

According to a new report from startup accelerator firm, Rock Health, $1.4 billion was invested into venture capital for digital health companies in 2012, a 46 percent growth from the previous year. In addition, the report from Rock Health found there were 56 percent more deals in 2012 than the previous year.

Meanwhile, in traditional healthcare technology avenues, like biotech and medicals, funding was down as much as 16 percent from the previous year.

Of the money raised by healthcare startups, $237 million was invested into health consumer engagement tools and $150 million was invested in personal health tools and tracking. $108 million was invested into EMR/EHRs and $78 million was invested in hospital administration tools.

The five largest deals of the year represented 20 percent of the year’s funding. T.Rowe Price’s Redmile Group invested $100 million into Castlight Health, which enables employees to compare costs and quality of healthcare services. Google Ventures’ NEA invested $58 million into 23andme, which makes human genome searchable. Other investments were in Care.com, GoHealth, and Best Doctors.

Of those digital health companies expected to IPO, EHR/EMR software company from San Francisco Practice Fusion is among those listed along with ZocDoc (doctor review and ratings) and Castlight Health.

The Bay Area and Boston saw the most investments into digital health startups.

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