Digital Health

Funding for digital health breaks the record again with $ 21.3 billion so far this year

Dive Summary:

  • In the first three quarters of this year, total funding for digital health businesses skyrocketed to $ 21.3 billion, breaking the 2020 annual record of $ 14.6 billion, according to a report released Monday by Rock Health.
  • The industry registered 541 deals with an average deal size of $ 39.4 million in the first three quarters, according to the report.
  • However, total transaction volume decreased with 169 transactions in the third quarter compared to 223 transactions in the second quarter. The third quarter also saw fewer mega deals of $ 100 million or more than in the second and first quarters.

Dive Insight:

The COVID-19 pandemic spurred an unprecedented rapid adoption of digital health services as patients avoided medical settings but still sought care amid early orders to stay at home. While telehealth use specifically has dropped since reaching record levels last April, interest and investment in the digital health space is still through the roof.

Investors are venturing outside of historic funding patterns, with more money going to women-led businesses, women’s digital health and health equity solutions, according to the report.

But as in 2020, companies that use software for research and development, along with those that provide on-demand healthcare services and those that support disease treatment, continue to “dominate the most funded value propositions,” Rock Health said.

Last year was the first in which digital health funding exceeded $ 10 billion, a figure that already doubled in 2021 with three months to go.

The first three quarters of 2021 have been the most funded quarters in history, although the third quarter was a bit slow from the first and second. The first two quarters saw about 24 megadeals each, while the third quarter saw 15 megadeals.

In the third quarter alone, funding reached $ 6.7 billion in 169 deals.

Among research and development companies, the third quarter saw mega rounds from XtalPi, Reify Health, and TrialSpark, with $ 400 million, $ 220 million, and $ 156 million in funding, respectively.

On-demand healthcare companies Maven and Pager secured settlements of $ 110 million and $ 70 million in the quarter, and digital health disease treatment companies InBrace and Woebot saw settlements of $ 102 million and $ 90 million.

This year, mental health is the most funded clinical indication with $ 3.1 billion raised, followed by digital health tools for cardiovascular disease management, diabetes, primary care and oncology.

Behavioral health provider SonderMind saw a $ 150 million deal in July, and Spring Health received a $ 190 million Series C round in September.

Financing women’s digital healthcare companies is no longer a niche space.

Funding for those companies in the third quarter was 2.3 times higher than in the same quarter last year, driven by deals from Maven, TMRW and Woebot.

CEOs have also closed more deals in the private market than ever, raising $ 3 billion in 103 deals so far in 2021. In the third quarter, they closed 19% of digital health deals, the highest percentage on record for Rock Health.

Investors are venturing outside of historic funding patterns, with more money going to women-led businesses, women’s digital health and health equity solutions, according to the report.

Source: https://news-primer.com/funding-for-digital-health-breaks-the-record-again-with-21-3-billion-so-far-this-year/

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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