Highlights: - The number of digital health deals has increased 82% from this time last year - The total amount of investment has increased 70% from this time last year 10% of digital health investors this year are new to healthcare

1. Q3 2012 REPORT
DIGITAL HEALTH FUNDING
A R O C K R E P O R T B Y

2. About
REPORT
We wanted to know more about startup funding of the digital health space. This
report sources data from Capital IQ, CrunchBase, NVCA and the Rock Health
funding database.
Caveat: we are not professional white-paperistas, just curious advocates
who like to share knowledge and further the discussion around the
evolving digital health space.
Produced by
this
Halle Tecco
@halletecco
Amy Puliafito
@amypuliafito
Malay Gandhi
@mgxtro
ROCK HEALTH is powering the future of the digital health ecosystem, bringing together the
brightest minds across disciplines to build better solutions. Rock Health funds and
supports startups building the next generation of technologies transforming healthcare.
ROCK HEALTH partners include Alexandria Real Estate Equities, Boehringer Ingelheim,
Fenwick & West, GE, Genentech, Harvard Medical School, Kaiser Permanente, Kleiner
Perkins Caufield & Byers, Mayo Clinic, Mohr Davidow Ventures, Montreux Equity Partners,
NEA, Ogilvy Public Relations, Qualcomm Life and UCSF.
LEARN MORE AT rockhealth.com

3. January
February
March
April
May
June
July
August
September
October
November
December
$55
$215
$253
$344
$569
$739
$771
$995
$1,081
$5
$47
$167
$250
$305
$390
$462
$569
$626
$727
$797
$956
2012
Only includes companies receiving $2M+ in venture funding
2011
Cumulative funding in millions
VC funding of digital
health continues to grow
70% more money
84% more deals
compared to Q3 2011

4. 103 digital health companies
each raised $2M+ in 2012

5. 3M Aberdare Aeris Capital Alsop Louie Partners Ascension Health Ventures
Ashby Point Capital Austin Ventures Avalon Ventures Ben Franklin Technology
Partners BIP Opportunities Fund Blue Cross Blue Shield Venture Partners
Bluff Point Associates Burrill & Company C&B Capital Canaan Partners
Cardinal Partners Catamount Ventures CHL Medical Partners CHV Capital City
Hill Ventures Claremont Creek Ventures Comcast Ventures Competitor Group
Connecticut Innovations Council Capital Draper Fisher Jurveston ePlanet
Draper Triangle Ventures Early Stage Partners Easton Capital Emerald Stage 2
Ventures Felicis Ventures First Round Capital Founders Fund Foundry Group
Four Rivers Group Franchise Growth Group Glengary Global Investment
Greylock Hatteras Venture Partners Health Enterprise Partners
Heritage Healthcare Innovation Fund Heritage Group HLM Ventures InCube
Ventures Insight Venture Partners iRobot Corp Jafco Ventures Khosla
Ventures Kleiner Perkins Merck Global Health Innovation Fund Milestone
Venture Partners Miramar Venture Partners Mitsui & Co Motorola Solutions
Venture Capital National Healthcare Services NEA New Atlantic Ventures New
Enterprise Associates New Leaf Venture Partners New Science Ventures New
World Venutres NJTC Venture Fund Norwest Equity Partners Oklahoma Life
Sciences Fund OpenView Venture Partners Osage Ventures PJC Capital
Premera Blue Cross Primus Capital Funds Qualcomm Ventures Redmile Group
S3 Ventures Sandbox Industries Sequoia Capital Sigma Partners SoftTech VC
Solidus Spark Capital T. Rowe Price The Running Company The Social+Capital
Partnership Top Tier Capital Partners Tribeca Venture Partners True Ventures
U.S. Bank National Association Venrock Vital Financial West Health Investment
128 VC firms invested
in digital health in 2012

6. 90%of these investors have
previous health
investments
10%are new to
healthcare (welcome!)

7. THE MAJORITY OF DEALS THIS YEAR HAVE BEEN
SERIES A OR SERIES B
$0M
$10M
$20M
A B C D or higher
$16.5M
$10.1M
$9.0M
$3.6M
Median raise by series (2012 YTD)Deals by series (2012 YTD)
A B C D or higher
32 21 12 8

8. NEA
THE MOST ACTIVE INVESTORS
COMPLETED 3-4 DEALS IN 2012
KHOSLA VENTURES
FOUNDERS FUND
ABERDARE
Investor Investments

9. THE FOUR LARGEST DEALS IN 2012
REPRESENT MORE THAN 20% OF YTD FUNDING
enables employees to compare costs
and quality of healthcare services
$100M
T. Rowe Price, Redmile Group
$50M
Norwest Equity Partners
health insurance comparison website
$50M
Institutional Venture Partners,
Matrix Partners, NEA and
Trinity Ventures
online marketplace for families to find
caregivers
$45.5M
Brown Brothers Harriman
arms employees with access to expert
physicians to help make decisions

10. $1.8M
OATV, Collaborative Fund,
First Round Capital
$1.75M
Adams Street Partners,
500 Startups
$1.45M
Floodgate Fund,
First Round Capital
$500K
Bridge Financing
around the clock email and phone
access to friendly doctors
social and local networks for people living
with or caring for the chronically ill
making medication adherence easy and
more enjoyable
next generation technology solutions to
support chronic disease management
ALSO, SOME NOTABLE STARTUPS
RAISED SEED FUNDING IN Q3 2012

11. $304M
$165M
$98M
$108M
$20M
$20M
$47M
$44M
$26M
$33M
Locations of 2012 Funded Startups
SF Bay Area 21
Boston 14
Chicago 5
Austin 5
Atlanta 5
Nashville 5
Washington DC 3
Pittsburgh 3
San Diego 3
NYC 2
SF BAY AREA AND BOSTON REPRESENT
NEARLY 50% OF ALL 2012 FUNDING

12. B2MD
7 deals
$40M
B2B
57 deals
$588M
B2C
37 deals
$448M
B2B IS A SIGNIFICANT FOCUS OF
INVESTMENT,WITH B2C FOLLOWING

13. B2B businesses remain majority of
funding, B2C grows slightly in 2012
2011
2012
0% 2500% 5000% 7500% 10000%
B2B B2C B2MD
FUNDED COMPANIES
BY BUSINESS MODEL

14. MEN WITH HEALTHCARE EXPERIENCE
LEAD MOST Q3 FUNDED COMPANIES
No healthcare experienceCEO has healthcare experience
Bachelors Masters Masters MBA MBA MBA MBA JD/MBA JD Masters
MBA MBA MBA MBA MD MD MD MBA PhD Bachelors
PhD Bachelors Bachelors Bachelors Bachelors Bachelors Unknown Bachelors Bachelors Unknown

15. 2012 TOP STATES FOR
DIGITAL HEALTH FUNDING
State # Deals Total $ Invested % of Overall
Funding
California 26 $339M 31%
Massachusetts 14 $165M 15%
Texas 8 $108M 10%
Illinois 5 $98M 9%
Pennsylvania 5 $47M 4%
Georgia 5 $44M 4%

16. Learn more:
• db.rockhealth.com
• rockhealth.com/resources
• rockhealth.com/portfolio
Presentation copyright © 2012 Rock Health
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