Mobile Health Funding Ramps Up in 2014

VC funding in health IT more than doubled with $1.8 billion raised in 161 deals, a 104 percent increase compared to the $861 million raised in the first quarter of 2014.

VC and mobile health

The majority of consumer-centric health care funding in the second quarter of 2014 went into the mobile health category ($401 million in 45 deals), and within mobile health, $129 million went to 23 companies developing apps, and $226 million went to 17 companies developing wearables, according to communications and consulting firm Mercom Capital Group.

Overall venture capital (VC) funding in the sector more than doubled with $1.8 billion raised in 161 deals, a 104 percent increase compared to the $861 million raised in the first quarter of 2014, and 10 of those deals were for more than $50 million each.

The top funding deal topping $100 million in the second quarter was the $135 million raise by NantHealth, a cloud-based health care IT company delivering care through a single integrated clinical platform, from the sovereign wealth fund, Kuwait Investment Authority and BlackBerry.

In second place was the $130 million raise by Flatiron Health, a developer of a cloud-based business and clinical intelligence oncology data platform, from Google Ventures, First Round Capital and Laboratory Corporation of America.

Globally, companies in the United States raised $1.6 billion from 140 of the $1.8 billion total and 161 deals, while 13 other countries recorded at least one deal apiece.

In the United States, 47 deals came out of California, followed by New York, which recorded 12 deals, Massachusetts with eight deals, and Texas and Tennessee with seven deals each.

Among cities, San Francisco had the highest number of funding deals among cities, with 18, followed by New York with 11. In terms of dollars, the order was reversed, with New York coming out on top with $247 million, followed by San Francisco with $206 million.

"It was a quarter of several milestones. It was the first billion-dollar fundraising quarter for the health care IT sector, which has now raised almost $7 billion in venture funding since 2010," Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a statement. "M&A deals were also at their highest levels this quarter, while mobile health companies continued to outraise other technologies."

Personal health companies received $115 million in 23 deals and scheduling, rating and shopping companies received $61 million in 12 deals, while practice-centric companies received 61 percent of all VC investments in the second quarter of 2014, with $1.1 billion in 61 deals.

Overall, the $2.6 billion raised so far this year has already exceeded the $2.2 billion raised in all of 2013, with 263 investors participating in these funding rounds--58 angel investors, including some well known celebrities and entrepreneurs, according to the report.