The health care IT sector also raised $648 million in debt and public market financing, bringing total corporate funding raised by the sector in 2013 to almost $3 billion.
Venture capital funding in the health care IT sector almost doubled in 2013, totaling $2.2 billion in 571 deals, compared with $1.2 billion in 163 deals in 2012, according to a report from communications and consulting firm Mercom Capital Group.
The deal count included 139 accelerator and incubator deals. The sector also raised $648 million in debt and public market financing, bringing total corporate funding raised by the sector in 2013 to almost $3 billion.
However, VC funding dropped in the fourth quarter of 2013 with $337 million in 147 deals, compared with $737 million in 151 deals in Q3 2013.
Overall in 2013, consumer-centric companies raised $1.1 billion. Mobile health companies were the largest recipient of VC funding, raising $564 million. Personal health companies received $198 million and social health companies brought in $166 million, the report said.
There were 466 investors involved in funding rounds for health care IT companies in 2013. The top VC investors were Khosla Ventures and The Social+Capital Partnership with eight deals each, followed by Norwest Venture Partners with seven deals and Kleiner Perkins Caufield & Byers with six deals.
"After record fundraising totals in 2013, health care IT companies have now received $4 billion in venture funding since 2010," Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a statement. "Mobile health companies led the way in 2013 as the technology transformation of the healthcare industry continues."
There were two health care IT initial public offerings (IPOs) in 2013, raising a combined total of $195 million. Benefitfocus, a provider of cloud-based benefits software, raised $131 million, and Covisint, provider of a cloud engagement platform for creating and enabling new mission-critical external business processes, raised $64 million.
Meanwhile, mergers and acquisitions (M&A) activity in the sector remained flat in 2013, with 165 transactions, compared with163 transactions in 2012. There were 44 M&A transactions in the fourth quarter of 2013, and there were 16 companies that made multiple acquisitions in 2013.
The largest disclosed M&A transactions was the $850 million acquisition of Passport Health Communications, a provider of technology solutions and services that help hospitals and health care organizations streamline business operations and secure payment for their services, by Experian, a global information services company.
Within the United States, the report found California led health care IT fundraising with 134 deals, followed by New York with 48, Massachusetts with 39, Texas with 29 and Tennessee with 26. A total of 43 states had at least one deal in 2013.