Strong decline of US investments in digital healthcare in the first quarter 19

According to Rock Health, an American investment fund specializing in digital health startups, $986 million was invested in 61 digital health care operations in the first quarter of 2019.

This is about half of what was harvested a year ago in the first quarter of 2018, a record year for the sector, but roughly in line with 2017 and 31% below 2016.

Among the startups that have shone there is the Calm meditation app; thanks to a valuation of one billion dollars, it has obtained 88 million dollars that the company expects to use to develop new content and expand internationally. Health Catalyst too, a provider of health analysis platform, has reached an estimated $1 billion, which has allowed it to obtain funding of $100 million. The company plans to continue building its platform that helps hospitals connect and analyze its data and appears to be planning an IPO.

The list of investors in the digital health sector includes well-known venture capitalists, technology and healthcare companies. Andreessen Horowitz, Khosla Ventures, New Enterprise Associates, Y Combinator, Novartis, Merck and GV all have made investments in the first quarter of 2019 and have consistently invested in this sector in recent years. Healthcare organizations have been among the most active investors in recent years. Kaiser Permanente, Mayo Clinic and Ascension have made more than 10 investments since 2014.

The last initial public offering by a US digital healthcare company dates back to 2016. The wait could end soon. In the first quarter, Livongo, Peloton, Change Healthcare and Health Catalyst were cited for listing plans. Goldman Sachs and JPMorgan lead all four IPOs.

Acquisitions include AbleTo, a virtual behavioral health provider who acquired Joyable, which offers coach support programs to overcome anxiety and depression. Meanwhile, Livongo acquired MyStrength, a company that offers evidence-based and clinically revised tools such as cognitive behavioral therapy (CBT). The MyStrength acquisition is Livongo’s third acquisition in 18 months and represents a trend that Rock Health expects to continue in the future.

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