Venture capitalists invested a total of $2.4 billion in digital health in the second quarter of 2018, according to a new report from Mercom Capital Group. Mercom tracked 196 deals, an increase in deal count but decrease in funding from the first quarter's $2.5 billion across 187 deals.
Comparing the year over year, the funding is a slight growth from $2.3 billion and 194 deals in Q2 2017. Funding for the whole first half of the year stands at $4.9 billion, up from $4 billion in the first half of 2017.
“Digital Health continues to grow at a record pace and is well on its way to smashing 2017’s record of $7.2 billion in VC funding,” Raj Prabhu, CEO and cofounder of Mercom Capital Group, said in a statement. “The space is maturing and is beginning to get the regulatory attention it deserves. Simultaneously, the tech giants are boosting digital health in a big way. M&A activity was also up, and overall, it was a very robust first half of 2018 for digital health companies.”
Mercom rated telemedicine as the quarter's top investment category with $523 million, and health apps in second with $288 million. These were followed by data analytics for $232 million, wearables with $215 million, mobile wireless with $180 million, and wellness with $161 million.
Different analysts, and publications, tend to find very different totals because it can be hard to come up with a consistent definition for digital health. For instance, Mercom's $2.4 billion is somewhat higher than the amount of funding MobiHealthNews tracked during the quarter, which came in around $2 billion.
The $4.9 billion figure — for the first half of the year — dwarfs Rock Health's more conservative $3.4 billion. StartUp Health, which casts a wide net in defining its terms, topped them both, reporting $6.3 billion for the first two quarters (and $3 billion in Q2).
Similarly, Mercom tracked 68 mergers and acquisitions during the quarter, compared to just 60 that Rock Health reported for the entire year. MobiHealthNews tracked just 15 in Q2 and nine in Q1. Differences in definitions as well as access to data about non-public acquisitions can account for some of those differences.