In Q1 2018, international virtual well being and healthcare IT investment set a brand new all-time document for investment in 1 / 4, and the sphere displays no indicators of slowing down. That is a space my analysis company, Mercom, actively tracks, so I sought after to proportion a breakdown of our key Q1 2018 findings.
General, VC investment within the sector all the way through the primary quarter soared to an all-time top of $2.five billion in 187 offers. The quantity used to be 47 p.c upper than the $1.7 billion raised in 192 offers in This fall 2017. Investment used to be additionally up 56 p.c year-over-year (YoY) in comparison to the $1.6 billion raised in 165 offers in Q1 of 2017.
Since 2010, cumulative VC investment within the virtual well being sector has now reached $28.1 billion in three,637 disclosed offers.
In Q1 2018, VC investment for virtual well being corporations within the U.S. higher by means of nearly $1 billion to $1.eight billion in comparison to the $887 million raised in This fall 2017.
The document international investment observed all the way through the primary quarter used to be boosted by means of a number of huge investment offers, with 5 corporations elevating over $100 million every. Simply the highest seven corporations on my own accounted for $1 billion in fundraising, and the highest 10 VC funded corporations accounted for nearly 50 p.c of all investment raised all the way through the quarter.
Information analytics dominates
Information analytics corporations persisted the fashion of being the class with probably the most investment by means of elevating $679 million all the way through the quarter. A vital quantity of investment within the class used to be generated by means of genomic knowledge research corporations.
Different virtual well being classes that disclosed over $100 million in investment all the way through the primary quarter have been cellular well being apps, with $247 million, telemedicine, with $178 million, advantages answers, with $160 million, and digital well being information with $146 million.
Any other class that had important investment in Q1 2018 used to be scientific resolution improve, with the ones corporations bringing in $516 million. The bulk used to be raised by means of precision medication corporations eager about genomics-based remedy choices and synthetic intelligence.
And right here’s a take a look at the sphere’s most sensible VC buyers by means of deal depend:
However whilst challenge capitalists opened their wallets broad to provide document investment to virtual well being corporations all the way through the length, M&A task declined. 40-eight merger and acquisition offers have been introduced in Q1, down from 57 M&A offers in This fall 2017. Yr over yr, there used to be a slight decline in task in comparison to 49 offers introduced in Q1 of 2017.
There have been two huge transactions for greater than $1 billion in Q1 2018 — the $1.nine billion acquisition of Flatiron Well being by means of Roche and the $1.2 billion acquisition of Talent Community by means of Inovalon.
Apply control answers corporations led M&A task, with seven transactions, adopted by means of knowledge analytics corporations, with six transactions. Medical resolution improve, cellular well being apps, and income cycle control corporations have been fascinated about 3 offers every.
Throughout the primary quarter of 2018, roughly part of the publicly-traded virtual well being corporations beat the efficiency of the S&P 500 index, which used to be down 2 p.c. The largest good points have been made by means of Connecture (whose inventory rose 83 p.c in Q1) and Adherium (which received 65 p.c).
The only IPO introduced in Q1 used to be for Chinese language health tracker and smartwatch maker Huami, which raised $110 million and indexed at the New York Inventory Trade.
M&A task has lagged within the virtual well being sector in fresh quarters. IPOs had been uncommon, and Huami’s IPO used to be the primary one introduced within the sector since 2016.
With the surge of investor hobby within the virtual well being sector and the document begin to 2018, be expecting to look this fundraising momentum proceed.
Raj Prabhu is CEO of Mercom Capital Crew.