Digital healthcare investment showed some strong signs of growth during the first few months of 2016. At the end of the year, it reached an estimated $4.2 billion. Hundreds of digital health companies relished their share of the pie. Interestingly, many of them were startups.
In fact, it was a “good” year for the companies that have revolutionized how we receive and deliver healthcare services. Nonetheless, the market could not keep up the momentum and ended the year with 8% lower total value than what was in the earlier year.
Experts believe this marginal decrease in the amount of digital healthcare investment has little to do with the overall market trend. It is poised to take further leaps in the coming years. This is considering the fact that the number of deals was slightly higher than that in 2015.
Changing Nature of Digital Healthcare Investment. More Deals but Less Total Value!
It’s not always the total value of the investment that drives the market. Several other factors also play a crucial role
As a matter of fact, 2016 was not a great time for digital healthcare investment. But on a positive note, it brought into light a different approach in how investors are pouring their dollars into the market. Here, we take a closer look at what it means
First, it indicates a major portion of the digital health funding came in for the startups. Quite understandably, the naive players do not attract as big an investment as a well-established company would. Note that this is good for the digital health market as the introduction of new companies, though smaller in size, means more competition. Consequently, we can expect more innovative technologies, reduced prices, and better user experience.
One such innovative online technology is provided by www.findatopdoc.com. It offers patients the facility to request an appointment with the best doctors in their area. In addition, you can get accurate health information about diseases, medications, medical procedures, supplements and everything that constitutes your health, in addition to today’s popular lifestyle choices.
Next, the size of the deals was not too big to cause a boom. However, slower infusion of capital investment means the whole process is in control. For this reason, we can say the situation of the digital health market is stable. Stability is key to the growth of any market, regardless of its type. We would definitely not want a roller coaster ride when investing our hard-earned money.
Top 5 Categories That Received the Most Digital Health Funding
- Genomics and sequencing $410 million
- Analytics and Big Data $341 million
- Wearables and Biosensing $312 million
- Telemedicine $287 million
- Digital Medical Devices $268 million
(*Amount in US dollars)
Genomics and sequencing is a trending healthcare approach that aims to revolutionize healthcare by decoding genes. In a similar manner, they have managed to grab the attention of investors. It is no surprise that they are on the top of the list.
The second category in the list, “Analytics and Big Data”,has not lost their charm and continue to lure investors.
Finally, wearables may not be as attractive as they were a few years back, but they still make it to the top three.
Largest Deals of 2016 Inside the US
It is interesting to know that the total value of the companies in this list accounted for 19% of the
digital healthcare investment.
Here is the complete list with the total amount of digital health funding they attracted.
- Human Longevity Inc. $220 million
- FLATIRON $175 million
- JAWBONE $165 million
- Healthline $95 million
- HealthCatalyst $70 million
- ACCOLADE $70 million
(*Amount in US dollars)
Most notably, the second largest deal worth $175 million was made for a new player, FLATIRON.
It is a new company that has been creating waves since its inception four years ago. As a cloud-based software company providing information on cancer, it connects patients, physicians, and researchers. That way, it aims to change how a patient accesses cancer care.
Digital Healthcare Investment 2016: Who Are the Top Investors
Altogether 451 investors tried their luck in the digital health market by injecting billions of their dollars. Most notable were GE ventures and Pfizer. The latter had its debut in this market.
Other major players in the digital healthcare investment who went ahead to make a fortune in this growing sector were .406 Ventures, ANDREESSEN HOROWITZ, and khosla ventures.
What Might The Future Be Like?
The healthy signs of growth in digital healthcare investment throughout the last year can indicate a positive future. In all cases, it will not be just about the dollars and the returns on the investments. It is also going to be about new technologies, better healthcare services, and ultimately, better treatment outcomes.
As some major business organizations are making their foray into the digital health market, we can expect the future days to be brighter, if not the brightest.
In addition, a number of startups are grabbing the attention of the biggest investors in a never-before-seen manner. To top it, increasing mergers and acquisitions (M&A) and digital health IPOs will only boost digital healthcare investment.
Want To Know More?
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