While 2019 is projected to have fewer digital health deals than 2018 — the first dip in five years — the estimated amount of funding pouring into the space continues to grow year over year, according to a new report by the Silicon Valley Bank.
Last year digital health companies worldwide raised a total of $7.21 billion, according to the report. This year the projected amount is up to $7.88 billion. However, more of that funding is coming from Europe than ever before.
While the US is still top dog when it comes to health tech investments with a projected $6.28 raise for 2019, Europe is catching up. In 2018 Europe raked in $533 million in funding. This number is projected to sky rocket and reach $1.59 billion by the end of 2019.
The report also found that mental health and diabetes tools have raked in the largest funding deals within the last few years. For example, Livongo, a chronic care management company which recently went public, raised $105 million in its last funding round in 2018, and Omada, another chronic care app, raised $73 million in June.
“Startups developing clinically validated, software-based solutions to prevent, manage, or treat healthcare conditions have begun to receive FDA approval. These digital therapeutics are becoming increasingly valuable, with one successful exit already on the books,” the report reads.
WHY IT MATTERS
While digital health deals may be cooling a little bit this year, the report shows that the funding amounts continue to grow. The report also shows the growing European market, possibly signaling a new trend for the future.
THE LARGER TREND
This isn’t the first report to see a slowdown in 2019. In October Rock Health came out with its Q3 report, which found that companies had raised a total of $1.3 billon in the last quarter, down from the roughly $2 billion seen in Q1 and Q2. It is important to note that Rock Health focuses its reports primarily on the US markets. Rock Health predicted a slowdown for this year in its 2018 end of year funding report.