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Digital Health Shatters Funding Records with $6.3 Billion in 1H 2020, Reports Mercom Capital Group

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Mercom Capital Group, llc, a global communications and research firm, released its report on funding and mergers and acquisitions (M&A) activity for the Digital Health sector for the second quarter (Q2) and first half (1H) of 2020.

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Global VC funding for Digital Health companies in the 1H of 2020 shattered all previous 1H funding records, bringing in $6.3 billion (B). Funding activity was up by 24% during 1H 2020, compared to $5.1B raised in 1H 2019.

In Q2 2020, Digital Health companies raised $2.8B in 161 deals, a 23% decrease compared to Q1 2020. Year-over-year, funding was down by 11% compared to $3.1B in 169 deals in Q2 2019.

Chart: Digital Health VC Funding 1H 2016-1H 2020

“Seen as a solution to many of the health challenges resulting from the COVID-19 pandemic, several digital health technologies and services have gone mainstream. Investors have noticed the potential, and Telehealth has been the biggest beneficiary and has received almost $2B in the 1H. mHealth apps and data analytics companies have also benefitted. Digital Heath companies had their best fundraising 1H ever and have now raised $50B venture funding in over 5,000 deals since 2010,” said Raj Prabhu, CEO of Mercom Capital Group.

Top-funded categories in 1H 2020 were: Telemedicine with $1.7B, Analytics with $826M, mHealth Apps with $794M, and Clinical Decision Support with $545M.

Chart: Top-Funded Digital Health Categories in 1H 2020

Telehealth companies received a record of $962M in 50 deals in Q2 2020. Funding increased 42% YoY in Q2 2020 compared to the same period last year.

Chart: Telehealth VC Funding Q2 2019-Q2 2020

Other top categories that received funding in Q2 2020 included mHealth Apps with $429M, Data Analytics with $253M, Wellness with $172M, and Medical Imaging with $161M.

Early round VC funding (Seed, Series A) came to $690M.

Four hundred and eighty-eight investors participated in funding deals in Q2 2020, compared to 433 investors in Q1 2020. Optum Ventures led Digital Health financing activity during Q2 with six investments. Seedcamp and Y Combinator each made four investments.

A record 921 investors participated in 1H 2020. This is the largest number of investor participation in 1H since 2010.

The Top VC deals in 1H 2020 included: $285M by ClassPass, $250M by Alto Pharmacy, $194M by Amwell (formerly American Well), $155M by KRY, and $150M by Concerto HealthAI.

Chart: Digital Health – Top VC Funding Rounds in 1H 2020

In 1H 2020, a total of 83 Digital Health M&A transactions were announced compared to 91 in 1H 2019. In Q2 2020, there were 42 M&A transactions compared to 46 M&A transactions in Q2 2019.

mHealth App companies were involved in ten M&A transactions in 1H 2020, followed by Data Analytics and Practice Management Solutions companies with nine each. Telemedicine companies recorded eight transactions, and Wearable Sensors and Wellness companies had five each.

Chart: Digital Health M&A by Major Category in 1H 2020

Chart: Top Digital Health M&A Transactions in 1h 2020 by Disclosed Amount

This report is 100 pages in length, contains 69 charts, graphs, and tables, and covers 731 investors and companies.

Mercom’s comprehensive report covers deals of all sizes across the globe.

Full Report

About Mercom Capital Group

Mercom Capital Group, LLC is a global communications and research firm focused on digital health, cleantech, and financial communications. Visit: www.mercomcapital.com to signup up for our market intelligence reports.