A new study found healthcare IT funding has doubled the number seen in 2013, with mobile devices and RCM pushing trends.
- Many healthcare executives are watching industry trends to help determine future investments. However, it seems that regardless of which trend they look for, technology is going to play a major part of it. In some instances, at a level never experienced before.
Recently, Mercom Capital Group, a global communications and consulting firm, released its annual report on funding and mergers and acquisition activity in 2014 for the healthcare information technology sector. The report covers all global deals to determine trends.
According to the latest numbers, venture capital (VC) funding in the healthcare IT sector more than doubled in 2014, when compared to the year before. In 2013, $2.192 billion was spent in 571 deals. In 2014, the monetary number increased to $4.743 billion, with only 99 more deals. These numbers are also substantially higher than previous years – 2012 ($1.174 billion, 164 deals), 2011 ($430 million, 49 deals) and 2010 ($211 million, 22 deals).
On top of that, the report also found that Healthcare IT has raised nearly $7 billion in total corporate funding over the last 12 months. A total of 732 investors were involved in funding activity from a record 29 countries.
“The Healthcare IT sector, in the five years since we started tracking funding data, raised $8.8 billion in VC funding and another $3.6 billion in public market and debt financings bringing the total to $12.4 billion – largely driven by the HITECH and Affordable Care Act. However, the enthusiasm in the sector shown by the VC community was not quite matched by the public markets when you look at market performance of companies that went the IPO route in 2014,” Raj Prabhu, CEO and Co-Founder of Mercom Capital Group, said in the report.
There were a number of technology areas that experienced growth over 100 percent year-over-year. The top five include:
When it comes mergers and acquisitions, the activity from 2014 included many larger, more established practice-focused companies. There were a total of 219 merger and acquisition within the healthcare IT sector. In 2013, there were 165 transactions.
The most activity came from revenue cycle management companies, which had 28 total transactions. That was followed by practice management (24 transactions) and mobile health (21 transactions). The highest amount spent in any one transaction was $4.4 billion. There were three other transactions over the last year that topped $1 billion.