- Category: mHealth
- Created on 15 October 2013
- Hits: 74
During the third quarter of 2013, there were a record number of health IT investments, with more than 150 separate deals totaling nearly $737 million, according to a report by Mercom Capital Group, Healthcare IT News reports (Miliard, Healthcare IT News, 10/15).
Details of Investments
Investments in the health IT sector reached $737 million in Q3 2013, including:
- $489 million invested in 59 provider-focused IT deals; and
- $248 million invested in 92 consumer-focused IT deals.
- Of the consumer-focused deals, $161 million went toward mobile health companies (Mercom release, 10/15).
Top Venture Capital Funding Transactions
The largest deal was a $100 million investment in Evolent Health -- a population health management company -- by the Advisory Board Company, UPMC Health Plan and TPG Growth. The Advisory Board publishes iHealthBeat.
Other leading investment deals included:
- Practice Fusion, which raised $70 million from Kleiner Perkins Caufield & Byers, OrbiMed Advisors, Deerfield Management Company and other investors;
- MedSynergies, which raised $65 million from undisclosed investors;
- Fitbit, which raised $43 million from Qualcomm Ventures, SAP Ventures, SoftBank Capital, Foundry Group and True Ventures; and
- Oscar, which raised $40 million from Thrive, Founders Fund, General Catalyst and Khosla Ventures (Healthcare IT News, 10/15).
Kleiner Perkins Caufield & Byers and The Social+Capital Partnership were the most active investors, each taking part in four deals during the quarter (Mercom release, 10/15).
Health IT-Related Mergers, Acquisitions
Meanwhile, there were 45 health IT-related mergers and acquisitions in Q3 2013 worth about $1.1 billion, an increase from 30 transactions worth $108 million in the previous quarter.
The majority of the transactions -- 22 -- were in the health information management sector.
The largest was a $644 million merger of Greenway Medical Technologies, a practice management and electronic health record vendor, and Vitera Healthcare Solutions, a private EHR developer.
Reasons Behind Increased Investment
According to Mercom, several factors contributed to increased investment in the sector, including:
- Federal funding under the HITECH Act running out;
- Increased adoption of EHR systems; and
- HHS' release of health care data.
In a statement, Raj Prabhu -- CEO of Mercom -- said that ACA implementation has encouraged the implementation of:
- Health insurance exchanges;
- Preventive care services;
- Wellness services;
- Population health assessments; and
- A shift away from fee-for-service care models.
These changes are "reflected in this quarter's funding transactions," Prabhu said, adding, "Funding into health care IT is on pace to double over last year" (Healthcare IT News, 10/15).