SAN FRANCISCO – Digital health saw a record $1.62 billion in funding in the first part of 2018, according to a report from Rock Health.
The funding spanned 77 deals in everything from disease diagnosis to disease monitoring to consumer health information.
“The report was spot-on in terms of where we’re seeing for investments,” said Asif Shah Mohammed, associate principal at ECG Management Consultants, a strategic consulting firm whose clients include hospitals, health systems, medical groups and academic medical centers.
The 10 biggest deals accounted for 55% of the funding but only 13% of the deals, and the average size was $21 million, compared to $16.4 million in 2017, according to the report.
“The market overall is ripe for investing,” said Tom Carroll, COO of mobile health platform emocha. “The broader markets that drive innovation are at an all time high valuation and interest rates are low—all that wealth and capital are looking to be deployed somewhere.”
The first quarter of 2018 was a wild ride for digital health M&A, wrote Megan Zweig and Denise Tran of Rock Health in the report, with 37 digital health companies acquired in the quarter.
“This puts the sector on track to beat last year’s 119 acquisitions and 2016’s 146 acquisitions,” they wrote.
Mohammed said the M&A activity is not surprising, as many different players are looking at the health care space from different angles. He said much of the movement is around enhancing the patient experience and building patient engagement—two big themes he expects to see more of in the future.
“There’s not a lot of insight into what happens to patients when they are out there in the wild after discharge,” Mohammed said. “We’re going to see more from platforms that can help facilitate the provider-patient communication and provide the data to enhance that.”