No “Trump Effect” on 2017 Health IT VC Funding, Report Finds | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

No “Trump Effect” on 2017 Health IT VC Funding, Report Finds

April 18, 2017
by Rajiv Leventhal
| Reprints

Venture capital (VC) funding in the health IT sector almost doubled quarter-over-quarter, coming in at $1.6 billion over a span of 165 deals, compared to $845 million in 159 deals in Q4 2016, according to a funding and M&A report from Austin, Texas-based research firm Mercom Capital Group.

VC funding in Q1 2017 was also up compared to Q1 2016 when nearly $1.4 billion was raised in 146 deals. The digital health sector has now received $20 billion in VC funding since 2010, per the report. “Digital health funding is off to a fast start this year and there was no visible ‘Trump effect’ on investments in the sector, at least in the first quarter, and publicly-traded Digital health companies actually fared much better in Q1 than last year,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a statement that accompanied the report.

Healthcare practice-centric companies received 35 percent of the funding in Q1 2017, raising $574 million in 50 deals compared to $261 million in 42 deals in Q4 2016. Consumer-centric companies received 65 percent of the funding this quarter, bringing in $1 billion in 115 deals compared to $584 million in 117 deals in Q4 2016.

Drilling down, the top-funded areas in Q1 2017 were: appointment booking ($315 million); mobile wireless ($230 million); data analytics ($193 million); population health management ($115 million); telemedicine ($112 million); and social health network ($102 million). Further, the top VC deals this quarter included: $200 million raised by Hudong Feng Technology (Haodaifu); $115 million raised by Alignment Healthcare; $100 million raised by PatientsLikeMe; $90 million raised by Nuna; and $85 million raised by PointClickCare.

In all, a total of 306 investors (including four accelerators/incubators) participated in funding deals in Q1 2017 compared to 340 investors in Q4 2016, of which two were accelerators/incubators. Health IT VC funding deals were spread across 19 countries in Q1 2017.

There were 49 M&A transactions (seven disclosed) in the healthcare IT sector in Q1 2017 compared to 42 transactions (11 disclosed) in Q4 2016. Practice management solutions companies were involved in the most M&A transactions with six, followed by apps and data analytics with five each, then consulting and telemedicine with four apiece. Meanwhile, the top disclosed M&A transactions were: $1.1 billion acquisition of CoverMyMeds by McKesson; Eliza Corporation’s $170 million acquisition from Parthenon Capital Partners by HMS Holdings; Castlight Health's $134 million buy of Jiff; and HCI Group for $110 million by Tech Mahindra.

The growth of VC funding in this segment stems from a record year in 2016, when venture capital funding, including private equity and corporate VC, in the healthcare IT sector totaled $5.1 billion in 622 deals.

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More



ONC Roundup: Senior Leadership Changes Spark Questions

The Office of the National Coordinator for Health IT (ONC) has continued to experience changes within its upper leadership, leading some folks to again ponder what the health IT agency’s role will be moving forward.

Media Report: Walmart Hires Former Humana Executive to Run Health Unit

Reigniting speculation that Walmart and insurer Humana are exploring ways to forge a closer partnership, Walmart Inc. has hired a Humana veteran to run its health care business, according to a report from Bloomberg.

Value-Based Care Shift Has Halted, Study Finds

A new study of 451 physicians and health plan executives suggests that progress toward value-based care has stalled. In fact, it may have even taken a step backward over the past year, the research revealed.

Study: EHRs Tied with Lower Hospital Mortality, But Only After Systems Have Matured

Over the past decade, there has been significant national investment in electronic health record (EHR) systems at U.S. hospitals, which was expected to result in improved quality and efficiency of care. However, evidence linking EHR adoption to better care is mixed, according to medical researchers.

Nursing Notes Can Help Predict ICU Survival, Study Finds

Researchers at the University of Waterloo in Ontario have found that sentiments in healthcare providers’ nursing notes can be good indicators of whether intensive care unit (ICU) patients will survive.

Health Catalyst Completes Acquisition of HIE Technology Company Medicity

Salt Lake City-based Health Catalyst, a data analytics company, has completed its acquisition of Medicity, a developer of health information exchange (HIE) technology, and the deal adds data exchange capabilities to Health Catalyst’s data, analytics and decision support solutions.