On The Rise: Digital Health Startups See Uptick in Year-Over-Year Venture Funding for Q1 2018
In a strong start to the year, total funding to digital health startups in Q1 of 2018 reached $1.62B. This number is a 10.2% increase over Q1 of 2017, which saw $1.47B flow to digital health upstarts. It also marks a record for the amount of funding raised by health tech startups in the first quarter of any year.
With several big exits in 2017 and 2018, including the $1.9B sale of Flatiron Health to Roche and the $1.1B sale of CoverMyMeds to McKesson, venture firms and the venture units of major corporations can’t ignore the potential value created by digital health startups.
Due to these recent exits and the strong momentum in digital health investing at the start of 2018, we expect funding to health tech upstarts will continue to grow this year.
Here is information about several prominent health tech deals from Q1 2018:
Wellington Management Company and Baillie Gifford & Company led a $240M Series E round of financing for HeartFlow, which creates 3D models of coronary arteries using CT scans to find blockages in artery flow and diagnose coronary artery disease in a non-invasive way.
Helix, a marketplace for DNA tests, raised $200M from lead investor DFJ Growth and existing investors such as Kleiner Perkins, Sutter Hill Ventures, Warburg Pincus, and Mayo Clinic. With Helix, customers pay $80 to have their exome sequenced. From there, they can take one of the genetic tests offered by over 50 companies and medical centers in the marketplace for a price between $10 and $200 per test.
Founders Fund led a $165M investment in Oscar Health, a major innovator in health insurance. Verily Life Sciences, Fidelity, 8VC, General Catalyst, Capital G, Khosla Ventures, Thrive Capital, and other investors participated in the deal. According to Crunchbase, this round brings Oscar’s total disclosed funding close to $900M.
Founders Fund, GV, and other significant investors deployed $110M to Collective Health, a company that allows employers to choose the specific medical expenses and services they cover for employees. This new funding brings Collective Health’s total funding to $230M.
Bigfoot Biomedical announced the completion of its $55M Series B round of financing. The startup combines connected devices like smartphones with machine learning to automatically deliver insulin to people who have Type 1 Diabetes or Type 2 Diabetes that requires insulin. The new round of funding added Abbott Laboratories as an investor.
In a $58M infusion of fresh capital, DNAnexus brought on Foresite Capital and Microsoft as new investors. DNAnexus allows researchers and pharmaceutical companies to optimize and de-risk their clinical trials.
American Well creates telemedicine solutions for health systems, employers, brokers, governments, and nursing facilities. It received a $59.2M strategic investment from insurer Allianz Group in January of 2018 while also announcing a partnership with Philips that will integrate its technology into the firm’s digital health electronics products.
In January, Pear Therapeutics announced it had closed a $50M Series B led by Temasek, a Singapore-based investment firm. Pear Therapeutics makes prescription digital therapeutics such as reSET, which is an FDA-approved solution for treating substance use disorder.
To provide a total healthcare solution, Quartet connects primary care and mental health providers to give patients personalized and data-driven treatment. It recently raised a $40M Series C led by F-Prime Capital Partners and Polaris Partners.
