report q4-2016 mercom healthtech funding

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Executive Summary

Healthcare IT Funding and M&A 2016 Fourth Quarter and Annual Report

Funding and merger & acquisition activity for the

Healthcare IT / Digital Health sector

http://www.mercomcapital.com

2016 Fourth Quarter and Annual Healthcare IT Funding and M&A Executive Summary


About Mercom’s Healthcare IT Funding and M&A Report

Mercom was one of the first research firms to track funding and M&A activity in the Healthcare IT

sector, starting in 2010.

Here is how our report is different: Our report includes deals of all sizes, globally, to present a

complete picture of Healthcare IT funding and technology trends. As an independent research

firm, we have no conflicts of interest with companies covered in this report.

• This is the most comprehensive report covering funding and M&A deals of all sizes,

globally. The trends revealed in this report give a more complete picture of the industry.

• This report does not cover bioinformatics and medical devices.

• All charts, graphs, and trends are clearly categorized and defined by technology and sub-

technology groups.

• This report includes concise deal information for every transaction.

• This report covers historical trends.

• As the industry evolves, our report evolves with it and we continuously improve the

information, analysis, charts, and trends covered every quarter.

Our subscribers include companies and executives from venture capital, private equity,

investment banking, healthcare, healthcare IT (aka digital health and eHealth), insurance,

healthcare associations, universities, tech firms, and more.

Audience Why they like our reports

Venture Capital/Private Equity leads from early-stage deals, technology trends

Investment bankers leads for funding and M&A deals, investor leads

Healthcare IT, Digital health sector trends, investor targets (by funding behavior, including

technology, technology partnership targets, and more)

Insurance companies acquisition leads, investment leads, technology partnerships

Large healthcare & Tech firms acquisition leads, R&D partnerships, investment leads

The report covers the technologies listed below and the sub-technologies under them.



Technologies Covered in This Report



• Global Healthcare IT/Digital Health venture capital funding grew nine percent YoY

with more than $5 billion in 622 deals in 2016, compared to $4.6 billion in 574 deals

in 2015.

• Total corporate funding into Healthcare IT - including VC funding, debt and public

market funding - came to $5.6 billion in 2016 compared to $8 billion in 2015.

• VC funding for Healthcare IT companies in Q4 was $845 million in 159 deals

compared to the $1.25 billion in 177 deals in Q3 2016.

• Healthcare practice-focused companies raised $1.6 billion in 185 deals, accounting

for about 32 percent of the total funding.

• Consumer-focused companies received about $3.5 billion in 437 deals, accounting

for 68 percent of the total funding raised.

• The top funded Healthcare IT areas in 2016 included Mobile Apps, which received

almost $1.3 billion, Wearable Sensors with $592 million, Data Analytics with $574

million, Telemedicine companies with $528 million, Mobile Wireless companies with

$228 million, and Wellness with $218 million.

1,071 1,365 1,591 1,254 845

145 146140

177

159

0

50

100

150

200

0

300

600

900

1,200

1,500

1,800

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Source: Mercom Capital Group

Healthcare IT VC Funding Q4 2015-Q4 2016

Disclosed Amount (US$M) No. of Deals

SELECT KEY

FINDINGS



• The top VC rounds in 2016 were the $500 million round by Ping An Good Doctor,

Chunyu Yisheng’s $183 million, Flatiron Health’s $175 million, Jawbone’s $165

million, and Meet You with $151 million.

• The average deal size in 2016 was $8.1 million, similar to 2015.

• There were 35 countries that recorded Healthcare IT VC funding activity in 2016.

Most of the funding was logged in the United States with over $3.4 billion in 431

deals. Countries other than the United States accounted for 33 percent of the total

funding with more than $1.6 billion.

0

1,000

2,000

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5,000

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Healthcare IT VC Funding 2010-2016 (By Technology)

Security

Revenue Cycle Management

Social Health

Service Providers

Personal Health

Telehealth

Scheduling, Rating & Shopping

Mobile Health

Health Information Management

$211M

$1,173M

$480M

$2,192M

$4,743M $4,637M

$5,055M



• Within the United States, California companies continued to receive the most funding

with $1.3 billion in 143 deals. New York was second with $440 million in 49 deals.

• For the first time, Health IT investors crossed 1,000. A total of 1,115 investors

(including accelerator/incubators) participated in VC funding rounds for Healthcare IT

companies in 2016 compared to 923 in 2015.

• There were 22 accelerators and incubators who participated in 83 deals in 2016,

compared to 2015 which had 55 deals involving 14 accelerators and incubators.

• Announced debt and public market financing for Healthcare IT companies fell to $533

million in 18 deals in 2016, compared to $3.4 billion in 29 deals in 2015.

• There were four IPOs in 2016 raising a combined $234 million compared to seven

IPOs in 2015 raising a total of $2.2 billion.



…….

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Healthcare IT VC Funding By Amount in Q4 2016 (US$ in Million)



• There were 205 Healthcare IT M&A transactions in 2016, slightly lower than the 219

transactions in 2015. There were 43 disclosed transactions in 2016 compared to 46

in 2015.

• Practice-focused companies were involved in majority of M&A deals in 2016 with

131.

• Consumer-focused companies were involved in 74 M&A deals in 2016.

• HIM companies were involved in 89 M&A transactions followed by Mobile Health

companies with 26, Data Analytics companies with 19, Telehealth and Personal

Health companies with 18 each, and Scheduling, Rating & Comparison Shopping

companies with 12.

Top 5 Healthcare IT M&A Transactions in Q4 2016 By Disclosed Amount

Company Terms/Amount

($M) Acquirer Country

465

USA

170

Netherlands

112

Japan

55

USA

40

USA




Introduction……………………………………………………………………….……...……….… 4

Key Findings……………………………………………………………………….……… 6

2016 Healthcare IT Funding and M&A ……………………………….……………….. 11

VC Funding 2010-2016………………………………………………………….….……………… 11

VC Funding …………………………………………………………………..….….……………… 12

Q4 - VC Funding………………………………………………..………….………..…… 12

VC - Funding by Technology…………………………………………….……………… 13

VC - Funding by Technology 2010-16………………………………………….……… 14

VC - Funding by Sub-Technology…………….……………………………..….……… 18

Health Information Management…………….……………..….……………. 19

Mobile Health…………….……………..….………………………………….. 25

Telehealth…………….……………..….…………………………………..…. 32

Personal Health…………….…………………………………..…..…………. 35

Scheduling, Rating & Shopping…………….………………...….…………. 37

Social Health…………….……………..….…………………………..………. 39

Q4 - VC Funding by Technology…………………………………….……….…..…….. 40

Q4 - Health Information Management…………….……………..…….……. 43

Q4 - Mobile Health…………….……………..….…………………………….. 48

Q4 - Telehealth…………….……………..….……………………………..…. 56

Q4 - Personal Health…………….…………………………………..….……. 58

Q4 - Scheduling, Rating & Shopping…………….…………..….……….…. 59

Q4 - Social Health…………….……………..….…………………….………. 60

VC Funding by Stage……………..………………………………..…….….……..….…. 61

Q4 - VC Funding by Stage………………………………………………...….………..... 63

VC - Activity by Country…………..………………………………................................. 65

2016 VC Funding Amount by U.S. State…………………….…..……………….......... 66

Q4 - VC Activity by Country…..………………………………………..….……….......... 68

Q4 - VC Funding Amount by U.S. State…………………….……….…..……….......... 70

Q4 - Trends in VC Funding Large vs Smaller Deals ……………..…....................... 72

Top VC Funding Rounds….………………………………….……………................... 73

Q4 - Top VC Funding Deals …..…………………...…………….….……...………….. 75

2010 – 2016 Top VC Investors……..………….….……….…...…………………..…… 77

2016 Top VC Investors……..………….….……….…...……………..…………..…….. 78

Q4 - Top VC Investors….……………………..…………...….…………………………. 79

Q4 - VC Deals………………………..……………………………….………..….….…… 80

Q4 - VC Investors by Technology Areas….………………..……...………...….……… 95

Top Accelerators/Incubators…………..………….……………………………………… 110

Q4 - Top Accelerators/Incubators……………………….………….…………………… 111

Debt and Public Market Financing……………………….………………….…………………… 112

Top 5 Debt and Public Market Financing Deals……….………….…………………… 113

Q4 - Debt and Public Market Financing Activity………….…………………………… 114

Q4 - Debt and Public Market Financing Investors…………………..………………… 114

Initial Public Offering (IPO)…………………………….……………….…………..………..…… 115

TABLE of

CONTENTS



Merger and Acquisition (M&A)…………………………….………………………………...…… 119

Q4 - M&A by Quarter……………………………………………………………………… 120

M&A by Technology………..…………………………………………….…….…….…… 121

M&A by Sub-Technology………..…………………………………………….…….…… 123

Q4 - M&A by Technology………..……………………………………….…….…….…… 126

Active Acquirers………..……………………………………….…….…….…….............. 128

M&A - Activity by Country…………..………………………………................................ 133

Top M&A Transactions….……………………………………….…………….................. 134

Q4 - Top M&A Transactions….……………………………………………….................. 135

M&A Transactions….………………….…………………………………………………… 136

New Healthcare Funds….………………….……………………………………………… 141

Q4 - Restructuring and Downsizing….………………….………………………………… 142



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