Investment in Healthcare Start-Ups On the Rise

Digital health funding continues to rise as biotechnology and software offer more solutions to fill gaps in the health care industry. The categories raising the most money include wearables, analytics and big data as well as consumer tools for buying health care products. In 2014, digital health care companies raised a total of $4.3 billion in funding. According to Rock Health, venture funding of digital health companies surpassed $2 billion through the first half of this year.

Venture capitalists are investing more into healthcare start-ups because of two major trends. The first is that the Affordable Care Act is allowing more people to access the health care increasing overall demand. Secondly, the health industry is a sector of the economy that remains under-penetrated by technological innovation. The companies that raised the most money this year include Jawbone, which makes wearable devices and NantHealth, which delivers real-time clinical data to physicians.

Part of Sir Richard Branson’s Virgin Group is an enterprise wellness platform called Virgin Pulse, another company amassing big capital. So far this year, five venture-backed digital health companies have gone public including Evolent Health, Fitbit, InVitae, Mindboy, and Teladoc. Together, the five companies were valued at nearly $11 billion in the market. Investing in healthcare start-ups and technology is producing major capital, improving labor productivity, and is starting to fill the market demand for digital health. 

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Alison Killian is a recent graduate of Grove City College who majored in Business Management and minored in Biology Studies. She is a contributor to Medical Groups and passionate about all facets of healthcare. She plans on continuing work in the healthcare field especially in management. She is very interested in healthcare innovation and finding ways to improve the current system. She hopes to go back to school in a few years to earn a degree in medicine.