Contenu connexe Similaire à Digital Health Funding 2013 Year in Review by @Rock_Health (20) Digital Health Funding 2013 Year in Review by @Rock_Health1. A R O C K R E P O R T B Y
2013A YEAR IN REVIEW
DIGITAL HEALTH FUNDING
2014 JAN 02
Our third annual funding report
2. S THE CALENDAR MOVES FORWARD FROM 2013 TO 2014, WE ARE
proud to report on funding in digital health for the
third straight year.
Over that time period, funding has more than doubled, with an
additional $1B pouring into our sector this past year versus
2011. Along the way, entrepreneurs have built up capital and
discovered additional funding avenues.
This is not an ephemeral trend. We are perpetually surprised
by the ingenuity of the entrepreneurs who choose to work in
healthcare. As digital health companies develop cash
generating business models that can threaten (or entrench)
incumbents, it seems venture investors, public markets and
acquirers are beginning to agree. Here’s to a well-funded 2014!
A R O C K R E P O R T B Y
AUTHORED BY WITH HELP FROM
MALAY GANDHI
@mgxtro
HALLE TECCO
@halletecco
DAN AXELSEN
DAN O’CONNOR
TOBIN PAXTON
SHEILA SHAH
ELISE XU
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
A
3. PRESENTATION © 2014 ROCK HEALTH
4 Dollars and deals Venture funding of digital health companies (2011-13)
Year over year change in venture capital funding (2013 vs. 2012)
Deals by financing round (2012-13)
10 Investors Distribution of investors by number of digital health deals (2013)
12 Demographics CEO educational background for funded companies (2013)
CEO gender for funded companies (2013)
Funding by geographic location of company (2013)
14 Alternative funding Campaigns and dollars raised on crowdfunding platforms (2013)
15 Exits and public markets Notable M&A transactions (2013)
Market capitalization and 52-week share price change of notable
publicly-traded digital health companies (2013)
Aggregate fundraising by notable digital health companies (2011-13)
19 Summary
Contents
KEY FIGURESSECTION
4. PRESENTATION © 2014 ROCK HEALTH
Venture funding of digital health companies (2011-13)
Digital health funding surpassed $1.9B in 2013, growing 39% over
the previous year and more than doubling since 2011
Source: Rock Health funding database
Note: Only includes deals >$2M
SMASHING RECORDS
4
$0.0B
$0.5B
$1.0B
$1.5B
$2.0B
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
$0.22B
$0.31B
$0.37B
$0.54B
$0.68B
$0.86B
$0.98B
$1.15B
$1.50B
$1.65B
$1.79B
$1.97B
2013
2012
2011
Deal volume was up 38%
in 2013 versus 2012, and
134% versus 2011
5. PRESENTATION © 2014 ROCK HEALTH
Year over year change in venture capital funding (2013 versus 2012)
Venture funding of digital health continues to significantly
outpace traditional healthcare sectors
DECLINING HEALTH
5
-17%
8%
39%
27%
7%
Source: PWC MoneyTree; digital health data based on Rock Health analysis;
Note: Digital health only includes deals >$2M
ALL SECTORS SOFTWARE BIOTECH
MED DEVICE
TECHNOLOGY HEALTHCAREBENCHMARK
DIGITAL HEALTH
7. PRESENTATION © 2014 ROCK HEALTH
TITLE OF TEXT
Slide title
(two line version)
Source, footnotes, etc.
• Escape is not his plan. I must face him, alone. Red Five standing by. Alderaan? I'm not going to Alderaan.
I've got to go home. It's late, I'm in for it as it is. I'm trying not to, kid. I have traced the Rebel spies to her.
Now she is my only link to finding their secret base. What?!
‣ You mean it controls your actions? Hey, Luke! May the Force be with you. You mean it controls your
actions? Obi-Wan is here. The Force is with him.
• A tremor in the Force. The last time I felt it was in the presence of my old master. The plans you refer to
will soon be back in our hands. All right. Well, take care of yourself, Han. I guess that's what you're best
at, ain't it? I care. So, what do you think of her, Han? Your eyes can deceive you. Don't trust them. Look, I
can take you as far as Anchorhead. You can get a transport there to Mos Eisley or wherever you're going.
• You mean it controls your actions? I'm trying not to, kid. But with the blast shield down, I can't even see!
How am I supposed to fight?
The six major themes of 2013 comprise almost 50% of all funding
for the entire year
Source: Rock Health funding database
Note: Rock Health categorizes companies into 24 categories PRESENTATION © 2014 ROCK HEALTH
Electronic health
records and surround
applications, including
clinical workflow
support
$
245M
EHR AND CLINICAL
WORKFLOW
Data aggregation and
analysis to support a
wide range of health-
care use cases
$
161M
ANALYTICS AND
BIG DATA
Hardware/software
designed to treat a
specific disease or
condition
$
146M
DIGITAL MEDICAL
DEVICES
Wearable consumer
devices that measure
specific biometrics
$
136M
WEARABLES AND
BIOSENSING
Comprehensive
platforms designed to
manage the health of
populations under the
shift to risk-based
payment models
$
126M
POPULATION
HEALTH
MANAGEMENT
Consumer tools for the
purchasing of
healthcare services or
health insurance (B2B
and B2C)
$
119M
HEALTHCARE
CONSUMER
ENGAGEMENT
........................................................
7
8. PRESENTATION © 2014 ROCK HEALTH
Nearly 20% of all funding in 2013 came from the six largest deals
of the year
Source: Rock Health funding database, company releases, SEC filings 8
$
100M $
85M $
48M
POPULATION HEALTH
MANAGEMENT
Technology-driven MSO
for population health
TPG Capital EHR AND CLINICAL
WORKFLOW
Cloud-based electronic
health record for
physicians
KPCB, OrbiMed,
Deerfield, Qualcomm
Ventures, Longitude
Capital, Artis, Industry
Ventures, Band of
Angels
DIGITAL MEDICAL
DEVICES
Intelligent orthopedic
devices that provide
real-time, actionable
information
Dignity Health, Ziegler
Meditech Equity
Partners
$
45M $
43M $
42M
DIGITAL MEDICAL
DEVICES
Ingestible biomedical
sensor and companion
biometric patch
Novartis, Oracle,
Otsuka, Sino Portfolio
WEARABLES AND
BIOSENSING
Personal motion sensor
and associated online
service that tracks your
physical activity
Qualcomm Ventures,
SAP Ventures, Softbank
Capital, Foundry Group,
True Ventures
ANALYTICS AND
BIG DATA
Health care data
warehousing provider
Norwest Venture
Partners, Sequoia
Capital, Sorenson
Capital, CHV Capital,
Kaiser Permanente
Ventures, Partners
Healthcare
9. PRESENTATION © 2014 ROCK HEALTH
Deals by financing round (2012-13)
The increased volume of early stage deals is the primary driver of
year-over-year deal growth
Source: Rock Health funding database
Note: Only includes deals >$2M with explicit deal stage announced
KNOW YOUR ABCS
9
2012
2013
SEED OR A
39%
B
34%
C
16%
D+
11%
SEED OR A
51%
B
27%
C
14%
D+
8%
5 companies progressed from
seed or A to B stage from 2012-13
7 companies progressed from
B to C stage from 2012-13
4 companies progressed from C to D or
D and beyond to further from 2012-13
10. PRESENTATION © 2014 ROCK HEALTH
While the long tail of VC dabblers in digital health continues to
increase, serial investors tripled from 2012
Source: Rock Health funding database
Note: Only includes deals >$2M; “serial” is considered as 3+ investments 10
HIGHLIGHTS OF VC ACTIVITY
• 302 separate investment firms or notable angels
completed digital health deals in 2013
• 27 venture firms did three or more deals in 2013,
as compared to only 8 in 2012
• Dabblers (1 investment each) grew by over 70%
versus 2012, and 75% of these investors
completed zero deals in 2011 or 2012
• 32% of digital health dabblers from 2012
invested again in 2013, with 8 joining the ranks
of the serial investors, closing 3+ deals each
CAN I PLAY?
Distribution of investors by number of digital health
deals (2012-13)
0
10
20
30
40
50
1 2 3 4+
NUMBER OF DEALS
NUMBEROFINVESTORS
250
240
140
35
29
20
3
7
5
2013
2012
11. PRESENTATION © 2014 ROCK HEALTH
Most active digital health investors by number of deals (2013)
A diverse group of prolific digital health investors emerged in
2013, much to the joy of entrepreneurs
Note: Only includes deals >$2M; multiple investments in the same company in
2013 are considered a single deal for purposes of deal count
KING OF THE MOUNTAIN
11
7
6
4
3
BCBS VP
DCM
Excel Venture
First Round Capital
FirstMark Capital
Google Ventures
Heritage Group
HLM
Intel Capital
KPCB
Lemhi Ventures
Lerer Ventures
Mayfield Fund
MemorialCare
Milestone VP
Noro-Moseley
Safeguard Scientifics
Sandbox Industries
Sequoia Capital
Venrock
West Health
12. PRESENTATION © 2014 ROCK HEALTH
With entrepreneurs choosing to locate their companies in Silicon
Valley, California has established itself as the digital health hub
Note: Digital health companies based in California raised $686M in total
funding, representing one-third of all funding in 2013 12
Funding by geographic location of company (2013)
THE CENTER OF THE UNIVERSE
49
4
7
6
7
4
5
8
18
$200M+
$100-200M
$50-100M
$10-50M
>$0-10M
# of funded companies
in metro area
LEGEND
13. PRESENTATION © 2014 ROCK HEALTH
BACK TO SCHOOL
The CEOs of funded digital health companies are overwhelmingly
male and highly educated
Source: Company websites, LinkedIn, Rock Health analysis
WHERE THE LADIES AT?
13
CEO educational background for funded companies (2013) CEO gender for funded companies (2013)
54%
OF CEOS HAVE A
GRADUATE DEGREE
MBA
25%
PhD
10%
MD
9%
Other
9%
........................................................................................................................................................................................
93%
OF CEOS ARE MALE
14. PRESENTATION © 2014 ROCK HEALTH
Campaigns and dollars raised on crowdfunding platforms (2013)
Indiegogo has established itself as the de facto platform for
digital health crowdfunding
Note: Only includes campaigns which concluded in 2013
Source: Crowdfunding platform websites
WINNERS AND LOSERS
14
........................................................................................... ................ .........
31%
75%
67%
CAMPAIGNS
(SUCCESS RATE)
$ RAISED CAMPAIGNS
(SUCCESS RATE)
$ RAISED CAMPAIGNS
(SUCCESS RATE)
$ RAISED
$7.8M
$438K
$897K
IN NUMBERS
• 120 campaigns tracked
• 67,644 individual backers
contributing $9.2M across
all campaigns
• 40% success rate across all
platforms
• 50% of all crowdfunding
dollars raised in 2013
came from only 5
blockbuster campaigns
15. PRESENTATION © 2014 ROCK HEALTH
EHR companies involved with M&A transactions (2013)
Electronic health record companies were active in M&A, seeking
platform extensions into consumer engagement and mobile
Source: Company press releases 15
POWER PLAYS GETTING HITCHED
Other notable acquisitions (2013)
ACQUIRER TARGET DESCRIPTION
Vitera
athenahealth
Allscripts
Cerner
Practice Fusion
Greenway Medical ($644M)
SuccessEHS (undisclosed)
EHR roll-up
Epocrates ($293M) Mobile app for
physicians
dbMotion ($235M)
Jardogs ($24M)
Population health
management and
consumer engagement
Labotix Automation
(undisclosed)
PureWellness (undisclosed)
Laboratory automation
and population health
management
100Plus (undisclosed) Consumer engagement
and analytics
DISCLOSED PRICE
PRICE TARGET ACQUIRER
$215M
$200M+
$200M
$150M
$150M
$100M
$35M
$20-30M
Liaizon Towers Watson
Humedica UnitedHealth
Group
Cardiocom Medtronic
MapMyFitness Under Armour
Appature IMS Health
BodyMedia Jawbone
Care Team
Connect
Advisory Board
Company
Avado WebMD
TARGET ACQUIRER
Consult a Doctor TelaDoc
DestinationRx Connecture
HealthyCircles Qualcomm
IncentOne WellTok
Intelimedix Blue Health
Intelligence
Physicians
Interactive
Merck
WaveMark Cardinal Health
WellnessFX Health Elements
UNDISCLOSED PRICE
16. PRESENTATION © 2014 ROCK HEALTH
It was a big year for digital health IPOs, with more than $5B in
market value created by two cloud-centric companies
Note: Current share price as of 12/31/2013
Source: NASDAQ, S-1 filings, company websites
Provides employers, insurance carriers, consumers and
government entities with cloud-based technology to shop,
enroll, manage and exchange benefits information
16
OFFERING: SEP 18 2013
$
71M
OFFERING
PRICE
$26.50
$53.55
$57.74
1ST DAY
CLOSE
CURRENT
PRICE
+102%
+118%
Investors: Oak Investment Partners, Goldman Sachs
Delivers industry-specific cloud-based solutions—including
data, software, and services—to the global life sciences
industry
OFFERING: OCT 16 2013
$
261M
OFFERING
PRICE
$20.00
$37.16
$32.10
1ST DAY
CLOSE
CURRENT
PRICE
+86%
+61%
Investor: Emergence Capital
17. PRESENTATION © 2014 ROCK HEALTH
CERN ATHN VEEV MDSO WBMD BNFT QSII MDAS HSTM VCRA
$0.4B$0.9B$1.2B$1.3B$1.4B$1.6B
$3.2B
$4.0B
$5.0B
$19.1B
Market capitalization and 52-week share price change of notable publicly-traded digital health companies (2013)
Digital health companies fared well in the public markets, with
most beating NASDAQ overall throughout a strong 2013
Note: Market cap as of 12/31/2013; 52-week share price change where available
Source: NASDAQ
TIME TO INVEST
17
44% 84% 61% 209% 175% 118% 21% 18% 34% -38%
NASDAQ
BASELINE
18. PRESENTATION © 2014 ROCK HEALTH
Aggregate funds raised for notable digital health companies (2011-13)
Capital buildups in brand name digital health companies over the
last three years will beg for someone to exit in 2014
Note: Companies are selected—chart does not show all companies that have raised >
$50M in the last 3 years; ZocDoc funding includes $55M convertible note raised in 2013
PILING UP CASH
18
$50M
$55M
$58M
$63M
$64M
$100M
$130M
$148M$668M
TOTAL
$668M Filed for an IPO
Raising $80M
Has raised $111M total from
Matrix, Trinity, NEA and IVP
19. PRESENTATION © 2014 ROCK HEALTH
FUNDING AND DEAL VOLUME Total digital health funding in 2013 reached $1.97B,
representing 39% growth versus 2012, and more than 100% growth versus 2011. There
were 195 digital health deals above $2M, representing 186 distinct companies and
reaching 38% annual growth, and 134% growth versus 2011.
MAJOR THEMES OF THE YEAR The six themes (Rock Health tracks 24 categories) that emerged
in 2013, representing nearly 50% of all 2013 funding included: EHR and clinical workflow,
analytics and big data, digital medical devices, wearables and biosensing, population
health management and healthcare consumer engagement.
PROLIFIC INVESTORS EMERGE 27 separate investors made three or more digital health
investments in 2013 (versus only 8 in 2012), and 75% of the 240 investors who closed a
single deal in 2013 had no recorded deals in 2011 or 2012.
ALTERNATIVE FUNDING FOR PRODUCTS The 120 campaigns we tracked raised $9.2M. 85% of
the dollars raised were on Indiegogo, which has become the de facto crowdfunding
platform for digital health. A little over 40% of all campaigns were successful.
EXIT ACTIVITY 2013 had two major IPOs that have generated more than $5B in market value
and 2014 holds the promise of eight name brand digital health companies that have
collectively raised well over half a billion dollars.
SUMMARY OF FINDINGS
19
20. SOURCES
The Rock Health Funding Database is updated
continuously by the Rock Health team using a wide
range of sources, including company announcements
and press releases, SEC filings (and websites that
report SEC filings) and CrunchBase. CapIQ is not a
primary source, but is used to reconcile and check for
missed entries. We are grateful to all the folks who
write about funding and make our lives a bit easier.
DATA
Our Funding Database is available for a fee on our
website. The dataset encompasses individual deals
back to 2011, provides details on each of the funded
companies, and profiles investors based on deal
volume. Updates are provided quarterly through the
end of the calendar year of your purchase. Please visit
rockhealth.com/research to learn more.
research@rockhealth.org
@rock_health
PRESENTATION © 2014 ROCK HEALTH