January’s record digital health funding

Malay Gandhi
February 03, 2014

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We were planning to wait until the end of the quarter to provide our first funding update of 2014. The VCs just wouldn’t let us—the $390M they poured into digital health companies across 25 deals during January represents the largest month of funding on record.

The figure is staggering. However, with Care.com growing into a $1B valuation following its IPO, Castlight’s pending offering that will value it at $2B, technology heavyweights Apple and Google both meeting with the FDA, and brand name tech investors Benchmark and Union Square Ventures taking a deeper look at the space, we’re going to go ahead and put this out there: 2014 will be another record year for digital health funding.

Five deals came in above $20M in the month:

  • MedHOK (Medical House of Knowledge), a platform for care, quality, and compliance designed for health plans and ACOs ($77.5M from Bain Capital Ventures and Spectrum Equity)
  • Health Catalyst, a data warehousing company for hospitals ($41M from existing investors Sequoia Capital, Norwest Venture Partners, Kaiser Permanente Ventures, Sorenson Capital, CHV Capital, and Partners Healthcare)
  • Kareo, a cloud-based medical office software provider for small practices ($29.5M from Greenspring Associates, OpenView Ventures, and Silicon Valley Bank)
  • MDLive, a telemedicine provider for on-demand healthcare services ($23.6M from Heritage Group, Sutter Health, and Kayne Anderson Capital Advisors)
  • TigerText, a HIPAA-compliant text messaging platform for care providers ($21M from Shasta Ventures, OrbiMed Advisors, New Leaf Venture Partners, Easton Capital, Reed Elsevier Ventures, New Science Ventures, and TELUS)

The analytics/big data category led in January, with eight deals totaling over $100M during the month of January alone (nearly two-thirds of the entire 2013 total). While Health Catalyst’s Series C was the largest deal in the category, newcomers Zephyr Health ($15M), Omicia ($6.8M) and Lumiata ($4M) each raised a Series A.

Payer administration was the second most active category, with four deals surpassing $119M in total funding. MedHOK was the major deal in the space, but was joined by core administration solutions from ikaSystems ($15M) and PlanSource ($12M), in addition to employer benefits management solution Zenefits ($15M).

If January is any indication, 2014 is shaping up to be even bigger than 2013 for digital health funding. Here’s our year end roundup of the biggest deals and trends in the industry.

Rock Report 2013 Funding Year in Review

Have a thing for digital health funding? Get data on all the deals, companies and investors here.