Mercom Capital Group, a global communications and consulting firm, releases a new report depicting VC funding and mergers and acquisitions activity in the healthcare IT third quarter 2014. According to the report, venture capital funding in the sector came to $956 million raised in 212 deals globally, a decline of 46 percent in terms of dollars compared to the massive $1.8 billion in 161 deals raised in Q2 2014, a rare quarter. Q3 2014 was still the second highest quarter for VC funding since 2010, though, and total VC funding year-to-date is $3.6 billion.
The quarter was dominated by more than 100 funding deals of less than $2 million. There were 252 investors that participated in the quarter including angels, VCs, private equity and corporate VCs. The quarter also included 12 accelerators/incubators.
“Healthcare IT saw another big fundraising quarter in Q3 with almost $1 billion raised. Companies from countries outside of the United States, accounted for a record 21 percent share of the funding. While consumer-centric companies attracted the majority of the funding this quarter, M&A has been a different story with the majority of the deals involving practice-focused companies,” said Raj Prabhu, CEO and co-founder of Mercom Capital Group.
Consumer-focused technologies received 65 percent of all VC investments, with $623 million in 140 deals compared to $678 million in 100 deals in Q2 2014. Areas that received the most funding under this category were mobile health with $345 million in 82 deals followed by telehealth, which had its best quarter, with $101 million in 16 deals; personal health with $85 million in 24 deals; social with $70 million in three deals; and scheduling, rating and shopping with $23 million in 15 deals.
Practice-centric companies received $333 million in 72 deals in the third quarter of 2014, compared to $1.1 billion in 61 deals in Q2. Under this category, the areas that received the most funding were revenue cycle management with $75 million in eight deals, and data analytics with $71 million in 19 deals.
The top five VC funding deals in Q3 2014 were the $70 million raise by DXY (Ting Ting Group), an online healthcare community for medical institutions and healthcare providers in China, from Tencent Holdings Limited, a provider of comprehensive internet services in China, followed by the $52 million raise by Proteus Digital Health, a developer of products and services integrating medicines with ingestible sensors, wearable sensors, mobile and cloud computing.