Mercom Capital Group released its report on funding and merger and acquisition (M&A) activity for the Digital Health sector for the first quarter of 2020. Mercom’s comprehensive report covers deals of all sizes from across the globe.
Global venture capital (VC) funding, including private equity and corporate VC into Digital Health companies in Q1 2020, came to a record $3.6 billion (B) in 142 deals compared to $1.7B in 142 deals in Q4 2019. VC funding in Q1 2020 increased 79% compared to Q1 2019 when $2B went into 149 deals.
Of the $3.6B raised during the quarter, the top 10 deals accounted for ~42% of funding with $1.5B from investors, including GV (formerly Google Ventures), New Enterprise Associates (NEA), SoftBank, Vision Fund 2, Bain Capital Ventures, and Bessemer Venture Partners.
Digital Health companies have raised over $47B in VC funding since 2010.
GRAPH: Digital Health VC FUNDING Q12019-Q1 2020
“There was no evidence of coronavirus affecting digital health funding in Q1. Going forward, we anticipate investors to become more selective in this environment. The era of ‘I don’t want to miss out’ investments may be over. That may not be a bad thing,” said Raj Prabhu, CEO of Mercom Capital Group.
The top-funded categories in Q1 2020 were: Telemedicine with $788M, followed by Data Analytics with $573M, Clinical Decision Support with $446M, mHealth Apps with $365M, Healthcare Booking with $306M, and Wearables & Sensors with $286M.
CHART: Top VC-Funded Digital Health Categories Q1 2020
The top VC deals in Q1 2020 included: $285M raised by ClassPass, $250M from Alto Pharmacy, $155M raised by KRY, $150M by Concerto HealthAI, $146M raised by Element Science, and $144M by Zhiyun Health.
CHART: Top VC Funding Rounds Q1 2020
433 investors participated in funding deals in Q1 2020. There were 14 FDA approvals issued in Q1 2020.
Telehealth companies (including telemedicine and remote monitoring) raised $930M in Q1 2020.
CHART: Telehealth VC Funding Q2 2019-Q1 2020
“The healthcare industry is really leaning on digital health technologies, particularly telehealth solution to tackle the Coronavirus pandemic. We anticipate funding trends to shift among digital health technologies, and we also see investors lose interest in certain products and solutions which would have been funded in a pre-COVID world,” added Prabhu.
In Q1 2020, there were 41 M&A transactions involving Digital Health companies compared to 44 in Q4 2019. In Q1 2019, there were 45 M&A transactions.
Practice Management Solutions companies led M&A activity with seven transactions followed by Data Analytics with four and Clinical Decision Support with three transactions.
CHART: Top 5 Digital Health M&A Transactions Q 12020
657 companies and investors were covered in this report.
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Mercom Capital Group, LLC is a global communications and research firm focused on digital health, cleantech and financial communications. Visit: www.mercomcapital.com to signup up for our market intelligence reports.
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