Funding growth at 23% and deal growth over 17% as investors fund a diverse array of digital health companies ranging from EMR/EHR companies to health and wellness to patient monitoring.

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Digital health financing is booming as companies in the industry pulled down over $1.5 billion in venture capital, angel, and private equity funding in the last year across 362 deals. Over the past two years, there has been overall YoY funding growth of over 23% and deal growth of over 17%.

Digital health for the uninitiated can be defined broadly as technology (websites, mobile apps, software and hardware) applied to the health and wellness and healthcare industries. The industry spans a wide array of use cases and end-customers ranging from platforms that allow you to book a local doctor or dentist online, websites that allow you to track your daily fitness and nutrition habits, to devices that send data about glucose levels back to healthcare providers, to cloud software used to store and share electronic medical records (EMR) and electronic health records (EHR).

Digital Health companies you’ll find on CB Insights span the following use cases:

  • Health and Wellness:  solutions that promote fitness and nutrition
  • Education and Training:  applications that educate individuals on diseases, recovery processes, treatments, and anything related to health or healthcare
  • Patient Monitoring:  monitoring a patient for certain symptoms or conditions and sending data back to healthcare providers
  • Networking and Communication:  allowing for interaction between different communities (healthcare providers, health and wellness enthusiasts, etc.)
  • Healthcare Access:  increasing access to routine and medical services by allowing patients to book or speak with a healthcare provider online or through an app
  • Healthcare Process Optimization: increasing the efficiency of administrative health processes (storing and accessing EHR/EMR data, revenue cycle management, transferring patients, room allocation, equipment management, etc.)
  • Diagnostics: diagnosing a disease or a condition

In terms of deal activity, digital health has seen a steady climb as can be seen in the above graph.  Funding levels have been more volatile driven by a number of funding spikes that have occurred due to larger mid- and later-stage firm financings.  These include the likes of a $70 million funding round raised by Jawbone in Q3 2011 as well as a $61 million private equity round to Essence Group Holdings and $75 million in Series C funding to ZocDoc . Q2 2012 saw a $100 million funding round raised by Castlight Health. Q2 2013 reached record funding levels, with eight companies raising funds exceeding $20 million. Notable financings include a $24 million Series B round raised by HealthTap and a $35 million growth equity round to WorldOne.

Details on the most active investors in the Digital Health space can be found on the ‘Research’ tab, after logging in to CB Insights. (Note: The list of most active investors is only available to paid subscribers.)

The increase in deal activity has been driven by deals mostly at the seed/angel and Series A stages as might be expected in a still evolving, nascent industry.