According to research from San Francisco-based Burrill & Company, a global financial services firm, digital health companies saw a 317 percent jump in financing in the first half of 2012 as investors this segment as a way to improve healthcare costs, access, and delivery. Investments in the sector have accelerated as venture funding grew to $499 million in 46 transactions during the first half of the year, compared to just $156 million in 19 transactions for the same period in 2011.
The largest digital health financings during 2012 include the healthcare pricing consumer information service Castlight Health's $100 million financing in May, web-based home healthcare software provider Kinnser Software's $39.9 million in March, EHR provider Practice Fusion's $34 million financing in June, and telehealth provider American Well's $37 million financing also in June.
"The increased funding in the digital health arena reflects a growing awareness of the transformative power these technologies are bringing to healthcare," G. Steven Burrill, CEO of Burrill & Company, said in a statement. "It is also an area that is attracting both traditional technology and life sciences investors, who recognize the ability these technologies have to reduce cost, improve care, and personalize care."
The pick-up in venture capital in the first half of the year stood in contrast to a decline in overall public finance activity. Global public finance fell nearly 43 percent to $27.7 billion in the first half of 2012. In the United States, public financings fell 17 percent to $18.3 billion during the same period.