The majority of exits in the digital health space are for companies that specialize in healthcare process optimization, which includes companies that provide EMR/EHR solutions, revenue cycle management, and clinical trial software solutions
Over the last year, companies in the digital health category took home $1.58 billion in venture capital and private equity funding. While a 23% jump in funding is nothing to sneeze at, exit activity in the digital health space has been seeing an even bigger boom.
The past four quarters saw 55 exit transactions via M&A or IPO, representing close to 50% YoY growth in exit activity. As shown in the chart below, exit activity in digital health has seen an uptick most recently with a spurt beginning in 2011. This coincides roughly with the interest in digital health overall.
Of the 125 digital health exits total through Q1’13, 93 of these exits (74%) were companies focused on Healthcare Process Optimization. This includes technologies aimed at increasing the efficiency of administrative health processes (storing and accessing EHR/EMR data, revenue cycle management, transferring patients, room allocation, equipment management, etc.) Exit activity outside of Healthcare Process Optimization was more limited: Only the Health & Wellness and Education & Training sub-categories within Digital Health have also seen double-digit numbers of exits between Q1’08 and Q1’13.
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