Global VC funding in digital health firms at USD 9.5 bn in ’18

According to global communications and research firm Mercom Capital Group, global venture capital (VC) funding in digital health sector touched $9.5 billion raised in 698 deals, higher than the previous record set in 2017 of $7.2 billion in 778 deals. The total corporate funding for digital health companies including debt and public market financing reached $13 billion in 2018, a 58 per cent increase from the $8.2 billion raised in 2017.

“Venture capitalists’ love of digital health companies is evident, but Wall Street is not yet convinced as more than 60 per cent of publicly-traded digital health stocks traded below the S&P 500 in 2018,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. He further noted that though funding deals every year have significantly outpaced merger and acquisition (M&A) and initial public offer (IPO) activity, exits continue to be a big challenge for digital health companies.

According to the report, there were seven Indian digital health companies that received VC funding; and two were involved in M&A transactions in October-December quarter of 2018. The highest funded categories in 2018 included data analytics with $2.1 billion, mHealth apps with $1.3 billion, telemedicine with $1.1 billion, mobile wireless technology companies with $847 million, clinical decision support with $714 million, and wearable sensors technology companies with $703 million.

On the M&A front, there were 223 transactions in 2018, compared to the 203 transactions in 2017.