Report: VC Funding in Health IT Dips | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Report: VC Funding in Health IT Dips

April 6, 2015
by Gabriel Perna
| Reprints

For the first time in a long time, venture capital funding in healthcare IT suffered a drop off, Mercom Capital Group, an Austin Texas-based research firm, reported.

The research firm reported that the total venture capital funding in the first quarter of 2015 was $784 million in 142 deals compared to $1.2 billion in 134 deals in Q4 2014 and $858 million in 163 deals in Q1 2014. While the end of the year to beginning of a new year drop off isn’t totally unexpected or unprecedented, the year-over-year decrease is the first time since the decade began venture capital funding in health IT has seemed to taper off. Since 2010, Mercom reports that the health IT sector has raised more than $10 billion.

Healthcare practice-centric companies raised $347 million in 44 deals in Q1 2015 compared to $568 million in 43 deals in Q4 2014. Consumer-centric companies raised $437 million in 98 deals this quarter compared to $643 million in 91 deals in Q4 2014. There was one exception to the drop off.

“Funding fell across the board with the exception of mobile health (mHealth), which was the bright spot this quarter. There was also significant M&A activity in the first quarter for mHealth companies. We have already seen 10 M&A transactions in Q1 compared to 21 in all of last year, which bodes well for exits in mobile health,” Raj Prabhu, CEO and Co-Founder of Mercom Capital Group, said in a statement.

Health Catalyst, a Salt Lake City-based analytics firm and former Healthcare Informatics up and comer, garnered the largest VC deal of 2015 thus far with a $50 million investment. A data analytics company, Invalon, went public and raised $600 million.

While VC funding was down, mergers and acquisitions were up. There were 56 deals in Q1, compared to 52 of Q4 of last year and 53 last year at this time. The largest was MyFitnessPal, a mobile health app, being bought by UnderArmour.

Topics

News

CMS Exploring Potential Behavioral Health Payment and Care Delivery Model

The Center for Medicare & Medicaid Services (CMS) plans to hold a one-day summit in September to solicit feedback and ideas for a potential behavioral health model to improve access, quality and cost of care for beneficiaries with behavioral health conditions.

MEDITECH to Soon Offer CommonWell Health Alliance Services to Customers

MEDITECH, a Westwood, Mass.-based electronic health record (EHR) vendor, has announced that it is set to offer CommonWell interoperability services early next year.

HITRUST CSF Certification Now Includes NIST Cybersecurity Certification

HITRUST has announced that HITRUST cybersecurity framework (CSF) version 9 enhancements now extend an “assess once, report many” approach as a standard security framework for multiple critical infrastructure industries and includes National Institute of Standards and Technology (NIST) Cybersecurity certification.

Premier: Analytics Helping Hospitals Optimize Blood Use

An analysis of 645 hospitals revealed that comparative data analytics to drive performance improvement has the potential to optimize blood use across numerous diagnoses.

Almost 80 Percent of Clinicians Still Use Hospital-Issued Pagers

A study examining the communication technologies used by hospital-based clinicians found that close to 80 percent (79.8 percent) of clinicians continue to use hospital-provided pagers and 49 percent of those clinicians report they receive patient care-related messages most commonly by pager.

Survey: IT Expenses per Physician Continue to Rise to Nearly $19,000

Information technology (IT) expenses for physician practices are on a slow and steady rise for most practices, and last year, physician-owned practices spent between nearly $2,000 to $4,000 more per FTE physician on IT operating expenses than they did the prior year, according to a recent Medical Group Management Association (MGMA) survey.