Record-Setting First Quarter for Digital Health Funding | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Record-Setting First Quarter for Digital Health Funding

April 6, 2016
by Heather Landi
| Reprints
Click To View Gallery

2015 was considered to be the year that digital health funding hit its stride, and the first three months of 2016 have shaped up to be a record-setting first quarter.

Two new reports on digital health funding both indicate that digital health already has seen a number of large deals in early 2016, creating a big uptick in funding growth. Startup Health Insights reports that digital health had a record $1.8 billion in funding in the first quarter of 2016, while Rock Health estimates that digital health funding reached $981.3 million, the highest first quarter total since the company began tracking deals in 2011.

“Our data shows digital health funding experienced an uptick with 13 percent trailing twelve months (TTM) growth and almost 50 percent year over year (YoY) growth (when compared to 2015’s first quarter—a record year itself),” Mitchell Mom, venture associate at Rock Health, wrote.

According to Rock Health, the two largest deals of the quarter represented over 34 percent of the quarter’s transaction value and contributed to the largest average deal size ($18.2 million) since Q2 2015.

Both reports stated that activity in Q1 2016 point to an overall trend seen in the past few years with dollars and average deal size growing, yet the number of deals, or deal volume, is dropping.

Rock Health lists the five largest deals of the quarter as Flatiron Health ($175 million), a business and clinical intelligence platform for cancer care providers; Jawbone ($165 million) develops and sells wearable technology that provides personalized insights into how users sleep, move and eat; HealthLine ($95 million) uses a taxonomy-driven search platform to provide intelligent health information to individuals; Health Catalyst  ($70 million), a healthcare data warehousing provider and Higi ($40 million) provides kiosks that screen for a user’s blood pressure, weight, pulse, and body mass index.

Startup Health Insights’ report highlights that 2016 already saw four deals over $100 million, as compared to seven in all of 2015. In its list of the top 11 deals in Q1 2016, Startup Health Insights included insurance upstart Oscar Health, a $400 million deal, which put it in the top spot, and the report also included MindMaze ($100 million), Guardant Health ($100 million), eGym ($45 million), Captricity ($35 million), MedCPU ($35 million) and Soothe ($35 million).

Both reports stated that big data/analytics has become a very active market within digital health, as is population health. According to Rock Health, the top six categories for digital health funding in Q1 2016 were wearables and biosensing, with $202 million total; analytics/big data with $200 million; population health management with $107 million, consumer health information with $103 million, healthcare consumer engagement at $61 million and EHR/clinical workflow with $49 total in funding.

“The top six categories accounted for over 77 percent of the deal value for Q1 2016; only wearables and healthcare consumer engagement maintained a place on the list from the end of 2015,” Mom wrote.

According to Startup Health Insights’ report, the most active investors in 2016 include institutional venture capital organizations, as well as a hospital system and a payor, continuing the trend of previous years of a diverse investor base. “Large organizations ramp up their investments and begin placing bets as they increasingly look externally for innovation. With such a disruptive digital health landscape, looking outside the walls of an institution is becoming an important strategy,” the report stated.

The top five investors in the first quarter of 2016 were Khosla Ventures, UPMC, Startup Health, BlueCross BlueShield Venture Partners and GE Ventures, according to Startup Health Insights.


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



Analysis: Healthcare Ransomware Attacks Decline in First Half of 2018

In the first half of 2018, ransomware events in major healthcare data breaches diminished substantially compared to the same time period last year, as cyber attackers move on to more profitable activities, such as cryptojacking, according to a new report form cybersecurity firm Cryptonite.

Dignity Health, UCSF Health Partner to Improve the Digital Patient Experience

Dignity Health and UCSF Health are collaborating to develop a digital engagement platform that officials believe will provide information and access to patients when and where they need it as they navigate primary and preventive care, as well as more acute or specialty care.

Report: Digital Health VC Funding Surges to Record $4.9 Billion in 2018

Global venture capital funding for digital health companies in the first half of 2018 was 22 percent higher year-over-year (YoY) with a record $4.9 billion raised in 383 deals compared to the $4 billion in 359 deals in the same time period last year, according to Mercom Capital Group’s latest report.

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.