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StartUp Health: Digital health investment hits $11.5B in 2017

The company has found that Q4 2017 was the largest fourth quarter on record with $2.3B of funding raised across 227 deals.

StartUp Health: Digital health investment hits $11.5B in 2017

StartUp Health has released its year-end report, showing that digital health investment has reached new heights with $11.5B raised across 794 deals — that's almost $3.5B more than 2016. The report has found that Q4 2017 was the largest fourth quarter on record with $2.3B of funding raised across 227 deals. Also, during the year – StartUp Health has caught a record numbers of deals of all sizes, from the most $1M deals to date to the most $100M deals to date.

Early stage deals continue to hold steady at 65% of total deal activity, though Series A has increased its share for the third year in a row and Seed rounds have the lowest percentage of total deals since 2014. The Series D deal count doubled since last year to 4% of all deals in 2017.

Though the median deal size has decreased, there were more deals at these stages than ever before, which is another indicator there is not yet an "early stage slump."

Top 5 deals of 2017, excluding Outcome Health's $800M round, were Grail ($914M), Guardant Health ($360M), Peloton ($325), Auris ($280M), 23andMe ($250M).

Top 5 sectors during the whole of 2017 were Patient / Consumer Experience with $1.64B raised across 191 deals, Personalized Health ($1.59B in 71 deals), Big Data / Analytics ($1.39B in 56 deals), Medical Device ($1.37B in 72 deals) and Wellness with $1.12B raised across 77 deals.

When it comes to the most active US metro areas, the San Francisco Bay Area tops the list with 65 deals, followed by New York City (26 deals), Boston (13 deals), Los Angeles (10 deals) and Chicago (5 deals).

Beyond the U.S., the top metro areas were London with 22 deals; Tel Aviv and Bangalore each with 17 deals; Stockholm, Toronto and Beijing each with 15 deals; Paris with 11 deals; New Delhi and Berlin each with 9 deals; and Singapore with 8 deals.

Finally, the most active investors of 2017 were Khosla Ventures with 10 deals; followed by Founders Fund, GE Ventures, Sequoia and Y Combinator each with 9 deals. Also on the list were F-Prime, Merck Global Health Innovation, NEA, Accel Partners, Bessemer Venture Partners, Norwest Venture Partners, and SafeGuard.

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