The Seventh Annual Fenwick & West Digital Health Investor Summit profiled a sector that continues to attract record levels in investment, further matures and consolidates, and that is leveraging the newest technologies in blockchain and artificial intelligence to improve the practice and delivery of health care. Speakers included Rock Health’s Bill Evans and Goldman Sach’s Peter van der Goes, who discussed the possibility of an investment bubble and outlook for 2019, and Ruchita Sinha of Sanofi Ventures, who talked about blockchain in digital health. Fenwick’s Kristine Di Bacco moderated a panel on machine learning and artificial intelligence in healthcare with guest speakers Brandon Ballinger, co-founder of Cardiogram; Alison Darcy, founder and CEO of Woebot Labs; and Christine Lemke, co-founder and president of Evidation Health.
Digital Health Megadeals Get Bigger in Q3 2018
Just over a year ago, we reported about the rise of the mega-round in digital health investments. At that time, we tallied nine investment rounds valued at more than $100 million in the first half of 2017. Deals in H1 2018 surpassed that with a total of 14 such megadeals, as we reported in earlier posts for Q1 and Q2. The surge has continued in Q3, with 11 rounds north of $100 million including five valued at more than $300 million and one hitting $550 million.
But while mega rounds were rare occurrences in 2017,[1] today they are becoming more common. So is it fair to say that $300 million is the new $100 million? Is there another superlative after “mega”?
Digital Health Investment Trends Q2 2018: Megadeals Become the Norm, China Rising
Private investment in digital health continued apace in the second quarter of 2018, based on our latest look at deal flow. As the sector has matured, growth in investment levels quarter-over-quarter and year-over-year appears sustainable for the foreseeable future.
Likewise, the closing of a handful of megadeals each quarter is becoming the rule rather than the exception. The second quarter saw seven megadeals for $100 million or more. That is right in line with the first quarter, when we also recorded seven rounds of $100 million or greater.
The top investees in the second quarter were diverse, ranging from biopharmaceuticals to artificial intelligence to primary care. This diversity may be a sign that investors are looking beyond the low-hanging fruit of infrastructure and patient engagement, or even diagnostic applications, to areas such as primary care where opportunities for digital disruption are less obvious.
It is also interesting to note that over half of the investment rounds of $100 million or more went to companies based in China. We’ve seen a steady increase in investments in Chinese digital health companies over the past few years. But this is the first time that we have seen them account for half of the top deals—including the three largest rounds for $200 million or more.
Here’s a summary of the seven largest deals of the quarter:
Investors Make Big Bets on Diagnostics in Q1 2018
Two trends stood out in our analysis of private digital health investments in the first quarter of 2018: bigger deals and more investment in companies targeting the regulated portion of the health care market.
As the digital health sector matures, Rock Health reports that investors seem more comfortable with larger and later-stage deals. The year
Five Takeaways From the Sixth Annual Fenwick Digital Health Investor Summit
Fenwick’s Sixth Annual Digital Health Investor Summit started on an upbeat note with Rock Health’s Megan Zweig sharing the venture fund’s mid-year funding report. After the uncertainty brought by the 2016 presidential election and the political drama surrounding the future of the Affordable Care Act, it would not seem surprising to see investors take
A Dynamic Digital Health Sector Means More and Bigger Deals
The digital health sector is beginning to mature and investors are pouring more money into more deals, reports Rock Health in its survey of digital health investment in the first half of 2017. And, we might add, into bigger deals. So much so that the sector has broken records for deal volume and value.
The
Payer/Provider Digital Health Investments Increase in Q1 2017
Last September, we noted that payers and providers were expected to become increasingly active digital health strategic investors given their challenges to improve margins and outcomes.
While there were only three investments by payer/providers in the second half of 2016, we saw a notable uptick in investment activity in the first quarter of 2017, when
Don’t Miss These 2017 J.P. Morgan Healthcare Conference Events in San Francisco
If your work involves life sciences dealmaking, you know it’s the time of year to start firming up your plans for the week of the J.P. Morgan Healthcare Conference. In the last 10 years, the second week of January in San Francisco has evolved from a J.P. Morgan private meeting for healthcare investors to a week
More Digital Health Device Makers Expected to Seek FDA Clearance
Investors are increasingly interested in companies with technologies that will be subject to U.S. Food and Drug Administration (FDA) regulation.
Until recently, some investors shied away from companies targeting the regulated space out of concern that the regulatory landscape created too much risk. However, thanks in part to new guidance from the FDA regarding the
Top Trends in H1 2016 Digital Health Investments
A few months ago, following our fifth annual Digital Health Summit, the attendees made some predictions about product development and investment in the rapidly growing sector. Now that we are more than halfway through the year, we thought it would be interesting to see how those predictions fared against the investment results from the