Digital Health Sector Received Funding of $9.5 Billion in 2018 - An All Time High

A recent publication from Mercom Capital reports that the Global venture capital (VC) funding in digital health in 2018 was $9.5 billion raised through 698 deals and saw a 32% increase from the previous record set in 2017 of $7.2 billion in 778 deals. However, the majority of the funds raised was in the USA that was close to $7 billion and the remaining $2.5 billion came from other countries. Of these 18 companies raised one-third of the capital. What this means is that the global healthcare digital market is dominated by the USA and the rest of the market remains relatively insignificant. Most of the funds were raised by Consumer-centric companies (about $5.2 billion in 447 deals).

Practice-centric companies raised close to $4.3 billion in 251 deals. Other companies that were funded belonged to Health Data Analytics ($2.1 billion), mHealth Apps ($1.3 billion), Telemedicine ($1.1 billion), Mobile Wireless Technology companies ($847 million), Clinical Decision Support systems ($714 million) and Wearable Sensors Technology companies ($703 million).

Apparently, since 2010, digital health companies have received $35 billion in VC funding in over 4,000 deals and almost $12 billion in debt and public market financing (including IPOs), bringing the cumulative funding total for the sector to $47 billion reports the publication.

Indian digital healthcare market remains relatively a small percentage of global investment. What irks the Indian healthcare market is the lack of regulation and antiquated healthcare laws. The recent battle in the courts ( In Delhi & Chennai) about the sale of online medicines is an example of this struggle. The government dithers for too long before any meaningful policy or regulations rolls out in this field.

Another example of ambiguity is the online consultation. So many websites offer this service but there are again no guidelines or law governing this virtual consultation and the apex body for a doctor called the Medical Council of India has never issued any statement for or against such a practice.

A handful of digital healthcare companies have raised significant capital for promoting these various models in our unregulated market. Companies that raised money on 'Practice management software' have now added many other services including customer lead generations through lab diagnostics and home care delivery of health services.

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Indian digital healthcare space will continue to struggle and so will many other developing countries for VC funding and of those who have raised significant capital are likely to go down under unless they step out of India and reinvent their business model. 

Reference:

1. About Mercom - (http://www.mercomcapital.com)

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Source-Medindia