Like figures from StartUp Health and Rock Health were not enough, we have Mercom Capital Group releasing its report on funding, and mergers and acquisitions (M&A) activity for the Healthcare Information Technology (IT) / Digital Health sector for the second quarter and first half of the year. However, what makes Mercom's numbers different is that they include deals of all sizes from across the globe, not just the U.S. and not just those that are worth $2 million or more.
The research company has tracked a record $4 billion raised across 359 deals in the first half of the year, up from $3 billion from 286 deals in the same period last year — representing a 36 percent year-over-year (YoY) growth.
The second quarter was the biggest yet, increasing 47 percent to $2.4 billion in 194 deals compared to the $1.6 billion raised in 165 deals in Q1 2017. In terms of the number of deals though, Q2 2017 holds the second position, after Q3 2014 when there were 212 deals.
"This was the best half and best quarter ever for digital health companies as a result of a few very large deals. We are now comfortably on pace to have the biggest funding year for digital health companies," Raj Prabhu, CEO and Co-Founder of Mercom Capital Group, said in a statement. "Even with such robust funding, there is still no sign of any digital health IPOs and M&A activity is yet to catch up to the funding momentum."
Healthcare practice-centric companies received 31 percent of the funding in Q2 2017 ($745M across 63 deals), with consumer-centric companies accounting for the rest (69 percent) with $1.6 billion raised across 131 deals.
The top funded areas in the first half of the year include Patient Engagement Solutions ($684M), Data Analytics ($458M), mHealth Apps ($399M), Booking ($391M), Telemedicine ($297M), Mobile Wireless ($275M), and Electronic Medical Records ($237M).
The top VC deals in Q2 2017 included: Outcome Health ($500M), Modernizing Medicine ($231M), PatientPoint ($140M), Blink Health ($90M), WuXi Nextcode ($75M), and ClassPass ($70M).
A total of 454 investors (including two accelerators/incubators) participated in funding deals in Q2 2017 compared to 309 investors in Q1 2017, of which four were accelerators/incubators.
When it comes to M&A transactions, Mercom caught 90 of them in H1 2017, compared to 110 in H1 2016, with Practice Management Solutions and Data Analytics companies being involved in the most such deals.
Prominent M&A transactions in Q2 2017 included: the acquisition of Best Doctors for $440 million by Teladoc, Cochlear's acquisition of Sycle for $78 million, athenahealth's acquisition of Praxify Technologies for $63 million, and the acquisition of Entrada by NextGen Healthcare (a subsidiary of Quality Systems) for $34 million.
Since it started tracking the digital health sector, Mercom has caught 3,031 VC funding deals worth $22.5 billion. An impressive figure, one gotta admit.