Digital Health Investments Rebound In April

Fenwick & West Life Sciences Group

Private investment in digital health rebounded in April after a lackluster March with more than $924 million in venture capital and private equity going into the sector. That tops the $700 million garnered by the sector in all of Q1.

More than half of the April total went to ABILITY Network, a health care information technology company that received a strategic investment of $550 million from Summit Partners. But even when you take the ABILITY investment out of the mix, April digital health investments totaled $374 million – an impressive uptick from March and consistent with the numbers we were seeing in February.

Digital health investments in March totaled $421 million, but that includes the $178 million Castlight Health IPO, in which Fenwick represented the company, and the $100 million Everyday Health IPO. That means private investment in the sector in March was just over $140 million.

Putting the outsized ABILITY deal aside, April was still marked by large private rounds. The next three largest investments accounted for 30% of total private investments for the month.

bswift, a cloud-based provider of HR and benefits software tools, took in $51 million in a private equity investment by Great Hill Partners. Blue Health Intelligence, a big data company targeting payers and providers, received $43 million from unspecified investors.

The third largest investment was a $40 million Series G round raised by One Medical Group, a primary care provider network that leverages technology to provide concierge-type medical care. Investors in that round included Oak Investment Partners, Google Ventures, and Benchmark Capital.

Including bswift and Blue Health Intelligence, five of the top ten investments went to SaaS companies related to health care insurance pricing or benefits management, including a $25 million investment in hCentive, a $17 million investment in Maestro Healthcare Technology from private equity firm Oak Investment Partners, and a $16 million Series B investment in Health Fidelity from Charter Life Sciences.

The month saw two investments in remote monitoring companies: $21 million to Sotera Wireless in a Series E round led by Intel Capital and Sanderling Ventures; and $17 million to InfoBionic in a Series B round that included Keiretsu Forum, Launchpad Venture Group and Mass Medical Angels.

Digital therapeutic company and Fenwick client Omada Health, which targets the progression of chronic conditions through behavioral change, closed a $23 million Series B round led by Andreessen Horowitz and that included US Venture Partners, Kaiser Permanente Ventures and The Vertical Group.

There was only one investment in practice management and workflow software, which has dominated investments in previous quarters. This went to Orange Health Solutions in a $23 million Series A round with undisclosed investors.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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