Mercom: Doctor appointment booking companies led $1.6 billion quarter for health tech funding

By Jonah Comstock
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ZocDocSo far in 2015, venture capital funding in the health IT space is up to nearly $3.6 billion, according to a new report from Mercom Capital Group.

Health IT venture capital funding for just the third quarter was at $1.6 billion across 148 deals, up 32 percent from Q2 2015 and 66 percent from Q3 2014.

Interestingly, the most lucrative area of funding for Q3 was "rating, booking and comparison shopping" which raised $728 million in 15 deals. The three largest funding rounds Mercom tracked this quarter were all in this space: a$394 million round by Guahao, a Chinese health information and appointment booking platform, the $130 million raised by ZocDoc, and the $90 million raised by Practo, which has a physician search engine to book appointments and rate providers. 

Mercom breaks mobile health into several different categories including mobile health, apps, wearables/sensors, and personal health and wellness. Mobile health took in $319 million, health apps raised $206 million, wearables and sensors raised $88 million and personal health and wellness got $114 million.

Practice management (at $72 million), telehealth (at $65 million), and data analytics (at $61 million) trailed behind.

Health IT funding wasn't led by a few prolific investors this quarter, but rather by 285 investors and six accelerators with one to three deals each. The most prolific investors were Lux Capital, Rock Health, Sequoia Capital, Tencent Holdings, and Zaffre Investments, with three deals each.

Mercom also noted the growth in acquisitions this quarter and, in particular, a shift toward more IPOs for consumer-focused companies.

"Consumer-focused health IT companies have continued to grab a larger portion of VC funding but have consistently lagged practice-focused companies in M&A activity," Raj Prabhu, CEO and Co-Founder of Mercom Capital Group, said in a statement. "This quarter, however, M&A activity increased with 18 consumer-focused transactions, the highest number for these companies in a single quarter. It is a very positive trend if it continues, because IPOs have not proven to be a sure path to success for the sector."

A number of different groups have come up with slightly different figures on 2015 funding totals to date, depending on how they delineate the digital health sector. Rock Health tracked total digital health investment for the first three quarters of the year at $3.3 billion. Startup Health came up with a $4.7 billion total, and Health 2.0 had the figure at $3.4 billion.