Mercom Capital Group has released its tally of 2020's digital health funding: $14.8 billion in equity raised across 637 deals, as well as $6.8 billion in debt and public market financing across 26 deals.
These represent a respective 66% and 278% increase over the firm's count for 2019, according to the Mercom report released yesterday. In total, 1,694 different investors took part in these deals.
In addition, the firm tracked a total of 184 mergers and acquisitions during the past year, a slight increase over the 169 transactions of 2019.
Looking at the fourth quarter of 2020 alone, Mercom's report highlights 139 equity funding deals totaling $4.5 billion, a 165% increase over Q4 2019.
WHY IT MATTERS
Beyond illustrating the staggering weight of investments digital health claimed during a year of pandemic, Mercom's breakdown identifies specific areas within the industry that received extra love from investors.
Standing at the top was telemedicine, which according to the report brought in $4.3 billion across the entire year (up 139% from last year's $1.8 billion). Following in its wake were investments into data analytics startups ($1.8 billion), mobile health apps ($1.4 billion), clinical decision support tools ($1.2 billion), practice management solutions ($837 million) and wearable sensors ($8.15).
(Image courtesy of Mercom Capital Group, a research and communication firm focused on digital health and cleantech.)
“COVID-19 supercharged funding activity in digital health in 2020," Raj Prabhu, CEO of Mercom Capital Group, said in a statement. "Ten digital health categories had their best year with record funding amounts."
Two other major trends were also highlighted in the report: the strong performance of 2020's digital health IPOs and the growing interest in consumer-facing digital health. For the former, Mercom noted a total of $6.2 billion generated by the year's IPOs was a major increase over last years $1.4 billion.
"It was also the biggest year for IPOs," Prabhu said. "We could see a lot more companies going public in 2021 if the current IPO and SPAC boom continues.”
Consumer-centric companies, meanwhile, increased their fundraising haul 81% year over year, with a total $9.6 billion.
"The pandemic has mainstreamed the consumer side of digital health technologies in less than a year," Prabhu said. "Digital health products that were a novelty a year or two ago are now a necessity."
Companies focused on healthcare practices also upped their annual raises by 47%, to $5.3 billion.
THE LARGER TREND
Mercom's numbers and trends generally fall in line with MobiHealthNews' observations, which pegged the year's raises at about $14 billion.
Our reporting and accounts from others watching the space throughout the year have generally identified 2020 as a breakout year as the market placed new weight on the benefits of virtual health technologies.
There was some speculation that the fervor had cooled a bit halfway through the final quarter, although this was counteracted by a strong finish from big names like Verily, DXY, Olive, Everlywell and Cityblock Health.