Rock Health reports digital health investing on the rise

Investors pumped $1.97 billion into 186 digital health companies in 2013, a 39% growth in terms of total dollars invested the year before and up 113% compared to 2011, according to a Rock Health report that only included companies that raised $2 million or more. Rock Health, a San Francisco-based digital health incubator, also reported that crowdfunding is growing for digital health startups, as it reported 120 campaigns raised $9.2 million in combined funding in 2013. Key findings are below. Rock Health’s report can be found online here.

Key findings:

Total digital health funding in 2013 reached $1.97B, representing 39% growth versus 2012, and more than 100% growth versus 2011

Medical device venture funding continues to decline (source: PWC MoneyTree), and digital health funding in aggregate is set to surpass medical device funding in 2014

There were 195 digital health deals above $2M, demonstrating 38% annual growth, and 135% growth versus 2011

Represents 186 distinct companies

Six themes (Rock Health tracks 24 categories) emerged in 2013, representing nearly 50% of all 2013 funding, including:

EHR / clinical workflow
Analytics / big data
Digital medical devices (clinically-oriented products with specific disease/condition focus)
Wearables / biosensing (consumer-oriented products with generalized biosensors)
Population health management
Healthcare consumer engagement (purchasing of health insurance, healthcare services and products, intended for B2B and B2C markets)

27 separate investors made three or more digital health investments in 2013 (versus only 8 in 2012)

We tracked 120 crowdfunding campaigns that ended in 2013:

$9.2M total raised (85% on Indiegogo, the go to digital health crowdfunding platform)
40% campaign success rate (31% on Indiegogo)
Crowdfunding is a blockbuster business, with the top 5 campaigns (~4% of all)  we tracked raising more than 50% of all the crowdfunding dollars, while the bottom 50% of campaigns raised virtually nothing (contributing ~1% of all dollars raised)

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