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Mercom Capital Group: Digital Health VC Funding Reaches $7.2 Billion in 9M 2019

AUSTIN, Texas--(BUSINESS WIRE)--

Total corporate funding in Q3 2019 came to $3.4 billion

Mercom Capital Group, LLC, released its report on funding and mergers and acquisitions (M&A) activity in Digital Health (Healthcare Information Technology) for the third quarter (Q3) and first nine months (9M) of 2019. Mercom’s comprehensive report covers deals of all sizes from across the globe.

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Global Venture Capital (VC) funding - private equity and corporate VC - in 9M 2019 was 10% lower year-over-year (YoY) with $7.2 billion (B) in 474 deals compared to $8B in 556 deals in 9M 2018. In Q3 2019, Digital Health companies raised $2B in 156 deals compared to $3.1B in 173 deals in Q3 2018.

Digital Health companies have now received ~$42B in VC funding in 4,622 deals.

Total corporate funding (including VC, public market, and debt financing) in 9M 2019 declined 19% with $8.9B compared with $11B in 9M 2018. Total corporate funding in Q3 2019 was down slightly with $3.4B compared to $3.6B Q3 2018.

Chart: Digital Health VC Funding 9M 2015 – 9M 2019

“After a strong Q2, funding and M&A activity slowed in the third quarter and financial activity is lagging compared the same period of last year. The performance of the much anticipated four digital health IPOs at the end of Q3 has been disappointing and the fate of future IPOs may depend on how well these companies fare,” said Raj Prabhu, CEO of Mercom Capital Group. “Large deals continued to dominate with six companies raising half of all the funding in the third quarter.”

The top funded categories in 9M 2019 were: Telemedicine with $1.5B, Analytics with $1.3B, and mHealth Apps with $1B, Healthcare Service Booking with $487M, Mobile Wireless with $437M, and Clinical Decision Support with $425M.

The top funded categories in Q3 2019 were: Telemedicine with $651M, mHealth Apps with $391M, Analytics with $201M, Mobile Wireless with $173M, Healthcare Service Booking with $151M, Clinical Decision Support with $138M, and Practice Management Solutions with $119M.

Chart: Top-Funded Digital Health/Healthcare IT Categories in 9M 2019

The top Digital Health VC deals in 9M 2019 included: $550M raised by Babylon, followed by $250M raised by Tencent Trusted Doctors, and $205M raised by Collective Health. Capsule and Tempus each raised $200M.

Chart: Digital Health – Top Five VC Funding Rounds in 9M 2019

There were 350 investors that participated in Q3 2019, compared to 419 in Q3 2018.

There were four Digital Health IPOs in Q3 2019 in the United States raising $1.2B.

In 9M 2019, there were 125 Digital Health M&A transactions compared to 172 in 9M 2018. In Q3 2019, there were 34 M&A transactions compared to 56 in Q3 2018.

mHealth App companies were involved in the most M&A deals in 9M 2019 with 21 transactions, followed by Analytics and Practice Management Solutions with 12 and 10 transactions respectively.

Chart: Digital Health M&A Activity By Major Category in 9M 2019

Chart: Digital Health M&A Q3 2018 – Q3 2019

Chart: Top Digital Health M&A Transactions in 9M 2019 By Disclosed Amount

This report is 94 pages in length, contains 69 charts, graphs and tables, and covers 513 investors and companies.

Mercom’s comprehensive report covers deals of all sizes across the globe.

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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 popular market intelligence reports.

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