2016 was a big year for digital health according to the StartUp Health report, which tracked $8 billion investments in more than 500 companies — four of which were above $400 million. The largest deal was OnDuo’s $500 million round, though that doesn’t come as a surprise since that company is a joint venture spin-off of Verily and Sanofi.
“Not only are more investors entering the scene, but they are also participating in more rounds than ever,” the report authors wrote. “2016 brought investment from almost 900 unique firms, angles of investment arms — almost 300 more than last year.”
The top deal makers included GE Ventures with 18 deals, Khosla Ventures with 15, and StartUp Health with 10 deals. Also, the total number of investors jumped by 42 percent, which was marked as “a huge signal of a booming industry.”
When it comes to most active market segments, patient or consumer experience topped the charts, raising $2.8 billion (across 163 deals) along the way. Wellness came in second at $1 billion; followed by personalized health or quantified self at $765 million, medical devices at $713 million; and there was another $593 million going to digital health products to improve workflow.
The report has also looked at how quickly rounds of funding are coming in — it took companies an average of 14.5 months to raise their Series A round. Patient- or consumer experience-focused companies had the shortest time between seed rounds and Series A, with an average of 13.3 months between investments, followed by medical devices, big data/analytics, clinical decision support and personalized health/quantified self, respectively.
The average size of a Series A round was 84 percent larger than that in 2015, or $1 million above the previous year’s total average deals. However, Series C deals dropped by 50 percent.
The San Francisco Bay area is the top US metropolitan area for digital health deals, nabbing $1.5 billion across 116 deals. Boston metro came in second with $966 million invested across 33 deals, followed by New York, San Diego and Los Angeles.