2012 Best Year for Health IT Venture Capital Funding Ever

Health IT venture capital (VC) funding in 2012 approached USD 1.2 billion, dwarfing the 480 million given in 2011, and the 211 million in 2010. These are the latest results reported by Mercom Capital Group (Austin, TX, USA), a healthcare information communications, and consulting firm.

The year 2012 concluded with 163 deals. The top five VC funding deals included 100 million raised by Castlight Health, which develops technology to enable comparisons of doctors, hospitals, and medical procedures based on price and quality; 58 million raised by 23andMe, a personal genetics company; 50 million raised by GoHealth, an online portal that helps compare health insurance coverage; 40 million raised by Kinnser Software, which provides clinical support to home health companies; and 34 million raised by Practice Fusion, which develops a free Web-based electronic medical record (EMR).

According to the report, the top investors that participated in VC funding rounds in 2012 were Connecticut Innovations, Founders Fund, Merck Global Health Innovation Fund, Qualcomm, and West Health Investment Fund (all with four deals each). Other notable investors included Aberdare Ventures, Canaan Partners, First Round Capital, and Khosla Ventures, with three deals apiece. In addition, although there was some overlap, slightly more funding in 2012 went towards consumer centric companies (582 million) than to companies focusing on health practice-centric technologies (591 million).

“While the focus of funding has been in the health information management category, which covers technologies on the healthcare practice side, there is significant investment and funding going into companies that engage the consumers – like mobile health, telehealth, personal health and social health,” said Raj Prabhu, managing partner of Mercom Capital Group.

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Mercom Capital Group