Patients and physicians can’t seem to get enough of the mHealth juggernaut, and venture capital investors are ensuring that they have a steady stream of products and services to gobble up by pouring record amounts of funding into the burgeoning market. A new report by Mercom Capital Group shows that mHealth, telehealth, personal and social health products, and other healthcare-focused apps and devices racked up $493 million in investments during the first three months of 2013 alone.
Data warehousing, cloud services, and data analytics deals made up a large chunk of the quarter’s funding, with more than $100 million headed to three companies covering the fields. Popular exercise device FitBit secured $30 million from undisclosed investors, and venture capital groups dished out another $30 to One Medical Group, an online primary care provider.
Acquisitions were also popular, with big companies like athenahealth and Allscripts snapping up Epocrates ($293 million) and dbMotion ($235 million) to round out their portfolios of services. There were 46 merger and acquisition deals last quarter, with health information management (HIM) companies attracting the most interest with 22 transactions. Service providers followed closely behind, with 11 companies bought out by bigger corporations.
mHealth is one of the fastest growing segments of the healthcare industry, with hundreds of companies competing to use EHR data in a meaningful way while connecting patients to providers, and providers to medical resources through their smartphones, tablets, and web applications. Investors are looking to cash in on the telemedicine market, which is expected to grow into a $300 million industry within the next six years, and the $26 billion consumer appetite for mHealth apps by developing start-up accelerator boot camps and lavishing funding on promising entrepreneurs.
“The trend we began to see last year of VCs investing in consumer-focused companies like mobile health, telehealth, personal health, social health, and scheduling, rating & shopping has become much more pronounced,” commented Raj Prabhu, CEO of Mercom Capital Group. “The enormous market opportunity in consumer-focused health has appeared to pique the interest of investors and is likely to continue to grow as witnessed by the surge in VC activity.”