How has the exit activity for health technology developed in the first half of 2019? This blog post explores health technology exit metrics through Q2 2019 and compares them to previous years. The graph below shows the number of health technology exits by year, stacked by quarters.
As the graphic demonstrates, health technology has seen a total of 37 exit events through Q2 of this year. This represents 56% of the total exits in 2018, and 88% of the exits through Q2 in 2018. Some of the exit events in Q2 2019 include Exonics Therapeutics’ acquisition by Vertex Pharmaceuticals, PatientsLikeMe’s acquisition by the UnitedHealth Group, and Beyond Meat’s IPO.
A straight-line projection of the completed exit activity this year would come out to 74 exit events, which exceeds the total exits in 2018 by 12%. On the other hand, a weighted quarterly average projection of 2019 exit activity would come out to 58 exit events, which falls short of the total exits in 2018 by 12%. Therefore, based on the mid-year data, health technology exit activity in 2019 is projected to be relatively equal to the exit activity in 2018.
How is the funding environment shaping up for health technology in 2019? As we pass the mid-year mark, let’s see how the year-to-date metrics compare to the historical trends. The graph below shows health technology total funding by year, stacked by quarters.
As the graphic demonstrates, health technology has amassed $9.4B through Q1 and Q2 of this year. This amount represents 51% of the total funding in 2018, and 105% of the funding through Q2 in 2018. In addition, the top three funding events in Q2 2019 include a $300M round into Impossible Foods, a $205M round into Collective Health, and a $190M round into Zipline.
A straight-line projection of the completed funding this year would result in $18.9B, which is 103% of the total 2018 funding. On the other hand, a weighted quarterly average projection of 2019 funding would result in $19.3B, which exceeds the total 2018 funding by 5%. Therefore, based on the mid-year data, health technology funding in 2019 is projected to surpass the funding in 2018.
The health technology industry has seen $84B in total all time funding. Let’s analyze the investors financing the health technology sector and identify the most active firms.
The graphic below highlights health technology investors based on the number of investments made in the sector. If an investor participates in two investment rounds in the same company (such as a Series A and Series B), that would qualify as two investments for this analysis.
As the graphic demonstrates, New Enterprise Associates has made the most bets in the health technology sector with 88 investments. Khosla Ventures follows with 80 investments. Examples of companies that New Enterprise Associates has invested in include Bright Health, Paladina Health, 23andMe, and Collective Health. The two CVCs rounding out the list include GE Ventures and GV.
Now that 2018 is complete, let’s examine how funding in health technology compares to previous years. The graphic below shows the total annual health technology funding amounts over time.
As the graphic demonstrates, 2018 experienced the highest health technology funding on record at $17.2B. It constitutes a slight 1% increase from the previous year’s funding. Some of the largest funding events in 2018 include a $550M round for Peloton, a $500M round for WeDoctor, a $500M round for Moderna Therapeutics, and a $375M round for Oscar Health. Over the past 5 years, health technology funding grew at a CAGR of 35%. It’ll be interesting to see if its funding will dip in 2019 or reach even higher levels.
This blog post examines the different components of the health technology ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.
Digital Medical Devices Is the Largest Health Technology Category
Let’s start off by looking at the Sector Map. We have classified 2250 health technology startups into 22 categories that have raised $81 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Digital Medical Devices is the largest category with 307 companies. These companies build IT-enabled medical and diagnostic devices for doctors. These devices include detection equipment, monitoring equipment, and surgical tools. Some example companies include Signostics, MediBeacon, Stimwave, and AliveCor.
Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.
The Pioneers Quadrant Has the Most Health Technology Categories
Our Innovation Quadrant divides the health technology categories into four different quadrants.
We see that the Pioneers quadrant has the most health technology categories with 10. These categories are in the earlier stages of funding and maturity. The Established quadrant has 7 categories that have reached maturity with less-than-average financing. The Disruptors quadrant contains 4 categories that have acquired significant financing at a young age. The Heavyweights quadrant contains one category, Healthcare Robotics. This category has reached maturity with significant financing.
Conclusion: The Digital Medical Devices Category Leads Health Technology
As the analysis above demonstrates, the Digital Medical Devices category leads health technology in total companies. We’ll see what’s in store for the health technology landscape in the new year!
We previously highlighted that health technology funding had the highest quarter on record in Q3 2018. This blog post will take a closer look at the funding trends within the individual health technology categories. Per our analysis, we notice two key takeaways:
The IoT Fitness category leads the sector in Q3 funding
The Digital Medical Devices category leads the sector in all-time funding
We’ll highlight these takeaways with some graphics and discussions below.
The IoT Fitness Category Leads Health Technology In Q3 Funding
To start off, let’s review the amount of funding raised this quarter per category within health technology.
The above graphic highlights that the IoT Fitness category leads the sector in Q3 funding with $0.9B. The Digital Medical Devices category follows in the second place with $0.8B.
IoT Fitness companies create connected devices that track fitness and exercise metrics. Such devices include healthy eating trackers, exercise tracking wristbands, and smartphone-controlled shoes. Some example companies in this category include Moov, Sensoria, Striiv, and Atlas Wearables.
Let’s now investigate how the healthtech categories’ funding compare with each other historically.
The Digital Medical Devices Category Leads the Sector in All-Time Funding
The graph below shows the all-time funding for the various health technology categories. The Q3 funding and growth rates of these categories are also highlighted.
As the bar graph indicates, the Digital Medical Devices category leads health technology in total funding at $15B. The Genomics category follows in the second place with $13B in total funding.
Digital Medical Device companies build IT-enabled medical and diagnostic devices for doctors. These devices include detection equipment, monitoring equipment, and surgical tools. Some example companies are Signostics, MediBeacon, Stimwave, and AliveCor.
In summary, the IoT Fitness category leads health technology in Q3 funding. The Digital Medical Devices category leads the sector in total funding.