Digital Health Funding Maturing Quickly
Startup Health has released the latest issue of its excellent quarterly digital health funding report:
Coming off a hot funding environment in 2014, this year is off to a slower start. Although less capital was invested in Q1 2015 than in Q1 2014, we believe this is due to an increase in investor focus and a sign of a maturing market emphasizing more developed companies that move beyond offering “features” to delivering outcomes and/or reducing costs. Startups need to demonstrate results and early validation, as well as abilities to scale to tap into today’s funding environment.
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Investors backed later stage digital health companies as the market matures
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Funding in breakout metro areas including San Diego and Denver grew significantly, but the Bay Area continues to lead with $390M
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Wellness startups increased in popularity to become the second most active subsector
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Close to 41% of all digital health funding YTD has 50+ relevance
The report focuses especially on the mature market (which Startup Health defines as “50+”). The report also ranks the top venture investors (GE Ventures is number one), classifies deals by subsector (bid data/analytics led the pack), and ranks the top 10 U.S. regions for investment. (As a very minor participant in the DC area’s digital-health community, I’m disappointed the nation’s capital is not in the top 10.)
Although funding was less in 2015 Q1 than 2014 Q1, it still exceeded 2013 Q1. Also, while the top five investments attracted 30 percent of new venture investment, the median size of early venture rounds continues to shrink significantly, which Startup Health characterizes as a “Golden Age of Entrepreneurship, as lower amounts of capital are needed to start a business.”
The entire report is available just by giving Startup Health your e-mail address. It is well worth the trade.
