Q3 2012 Digital Health Funding Report by @Rock_Health

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%