VC funding for digital health cos rises 46% to $8 b in 9 months

As total corporate funding for healthcare technology soars, global digital health venture capital (VC) funding in the nine months of 2018 reached a record $8 billion. Twelve Indian healthcare IT companies shone bright, having received VC funds of their own.

Mergers and acquisitions, too, marked the period, with the healthcare sector looking to take its ideas and products across newer territories.

Global VC funding for digital health companies in nine months was 46 per cent higher year-over-year (YoY) with a record $8 billion raised in 556 deals, as compared to the $5.5 billion in 586 deals in the nine months of 2017, according to Mercom Capital Group, a research firm.

Another record

The company says another annual record will be set this year as the $8-billion mark has already surpassed the previous high mark of $7.2 billion raised in all of 2017. A new record was also set in the third quarter of 2018 with VC funding coming to $3.1 billion in 173 deals surpassing the $2.4 billion raised in 196 deals in the second quarter of 2018.

“For the first time, we saw funding cross $3 billion in a single quarter in digital health. Funding raised year-to-date has already surpassed all of 2017 with a realistic chance of hitting $10 billion this year,” said Raj Prabhu, CEO of Mercom Capital Group.

The sector has significant momentum and substance behind this record funding, from regulatory support to entry of large tech and healthcare companies, including a slew of intellectual property applications and FDA approvals, he said.

Digital health companies globally have now received over $34 billion in the 4,006 VC funding deals, according to Mercom. Not to be outdone, Indian companies have also stepped ahead in the game.

The health tech sector in India has received funding injections designed to boost industry collaboration, improve support for patients and accelerate market connections.

CureFit, a health and fitness platform, received ₹823.8 crore (around $120 million) in Series C funding led by IDG Ventures, Accel Partners, and Kalaari Capital. HealthSignz, a provider of medical intelligence, raised $5 million in a Pre-series A funding round led by New Zealand-based Nirvana Health Group founder Dr Kantilal Patel.

While myUpchar.com, a Hindi language online source for health-related content, raised $5 million in Series A funding round from Nexus Venture Partners, Omidyar Network, and Shunwei Capital, HealthPlix, a developer of an Artificial Intelligence-driven electronic medical records app for patients, raised ₹20.7 crore (around $3 million) in Series A funding from IDG Ventures India and Kalaari Capital.

Among others, MyHealthcare, a provider of electronic medical records, raised ₹13.7 crore (around $2 million) in a Series A funding round led by Hunch Ventures with participation from Ajay Nanavati.

3Hcare, an online healthcare services aggregator, raised $1 million in its second round of funding, while Cyclops Medtech, a developer of wearable eye tracking goggles and software modules for diagnosing vertigo and balance disorders, got $1 million from Bengaluru-based marquee venture capital firm Unitus Ventures. Existing investor C P Bothra also participated in the round.

MedCords, a developer of an AI-enabled healthcare engagement app, raised $377,071 in funding from Info Edge India and WaterBridge Ventures.

MEngage Technologies, a doctor-patient engagement platform, raised $175,000 in seed funding from angel investors.

iNICU (Integrated Neonatal Intensive Care Unit), a provider of hospital workflow automation solutions, raised an undisclosed amount in pre-Series A funding, and Welcome Cure, an Indian online homeopathic treatment and consultation platform, raised an undisclosed amount of funding from Indian film stars Riteish Deshmukh and Genelia Deshmukh.

M&A space

In the M&A space, Persistent Systems acquired Herald Health (a digital health startup that enables doctors to manage electronic medical records more effectively) for an enterprise valuation of $5.2 million.

At the same time, online pharmacy Netmeds acquired telemedicine app JustDoc in a cash-and-stock deal. Though the terms of the acquisition were not disclosed, Netmeds is believed to have paid a little under $1 million.

Similarly, Symple Wellness Platform acquired AllizHealth, a provider of cloud-based wellness and preventive healthcare solutions. Terms of the acquisitions were not disclosed.

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