Digital Health Sees Record Cash Flow

Erin McCann | Healthcare IT News | July 9, 2014

'Not all funding is going so swimmingly though.'

Record amounts of cash continue to pour into the digital health arena, with the mid year numbers seeing record highs for year-over-year growth, according to a new Rock Health report. The explosive growth in digital health funding, however, has some analysts uneasy over a potential bubble in the market.

So far, 2014 has been a big year for digital health startups, with 143 companies raising a whopping $2.3 billion in just six months. This is more cash than companies raised in the entire year of 2013. As Teresa Wang, strategy manager at Rock Health pointed out, the deal sizes are also setting records from last year, pegged at $15.6 million per deal compared to $10 million in 2013.

"For those concerned about an overall venture bubble -- it's always hard to tell from the inside, but for context, we're still a ways off from the frothy 1999-2000 period," she wrote in a summary of the report.  In terms of where the cash is going, Rock Health officials highlighted that the lion's share, some 50 percent of the funding, came from analytics and big data; patient engagement; population health; personalized medicine; payer administration; and digital medical devices. The most notable change from last year was the payer administration arena, which saw 354 percent growth from 2013's $47 million in funding...