Despite COVID-19, digital health funding shattered all previous venture capital funding records for the sector by raising $6.3 billion in the first half of the year (1H), according to Mercom Capital Group.
The Austin, TX-based firm reported that the digital health funding in 1H was 24% higher than the $5.1 billion the space raised in the first half of 2019, despite the pandemic disrupting the economy. Mercom Capital Group is previewewed this data in advance of its upcoming 1H Digital Health Funding and M&A Report, which is expected to be published July 13.
Interestingly enough, venture funding reached $2.8 billion during the second quarter of 2020, an 11% decrease year-over-year compared to $3.1 billion raised in Q2 2019. Healthcare practice-centric digital health companies received 34% of the funding in Q2 2020, raising $947 million in 56 deals, and consumer-centric digital health companies accounted for 66% of the funding, raising $1.8 billion in 105 deals.
“Adoption of digital health technologies and products have accelerated since the COVID-19 outbreak, which is reflected in the funding spike in the first half of the year. Telehealth hype has been backed by $2 billion in venture funding with no signs of slowing down,” said Raj Prabhu, CEO of Mercom Capital Group.
This confirms what MD+DI has previously reported regarding telemedicine trends that emerged during the early days of the pandemic.
Other categories that received significant funding during the second quarter include mHealth apps, analytics, wellness, and medical imaging, Mercom reported.
The top-funded digital health categories in 1H 2020 were: telehealth with $1.9 billion, followed by analytics with $826 million, mHealth apps with $794 million, clinical decision support with $545 million, healthcare service booking with $326, and wearable sensors with $321 million.
The top telehealth VC deals in 1H 2020 included: $194 million raised by Amwell (formerly American Well), $155 million raised by KRY, $144 million raised by Zhiyun Health, $100 million raised by Mindstrong, and $93 million raised by Virta Health. Telehealth funding was distributed in 85 companies during 1H 2020.
The top overall digital health VC deals in 1H 2020 included: $285 million raised by ClassPass, $250 million raised by Alto Pharmacy, $194 million raised by Amwell, $155 million raised by KRY, and $150 million raised by Concerto HealthAI. Digital Health funding was distributed in 27 different countries in 1H 2020.
Mercom Capital Group is a global communications and consulting firm that produces funding and market intelligence reports covering a variety of "cleantech" sectors.