October Digital Health Investments Dominated by Diagnostics and Therapeutics

Fenwick & West LLP

Digital health companies raised just over $730 million through venture, private equity and angel investments in September, according to our latest analysis, bringing the total for the third quarter to approximately $1.3 billion.

Prior monthly analyses of the top digital health investments tended to be dominated by enterprise software systems for either payment or practice administration. But that was not the case in October.

In fact, there was only one reimbursement management software provider in the list of October’s 10 largest investments. The largest investments of the month related to genetic diagnostics and personalized medicine.

NantHealth, a diagnostic clinical platform that incorporates genomics data, raised $250 million from the Kuwait Investment Authority in the largest investment of the month. As I reported earlier, KIA made a $100 million investment in Nanthealth in May, and the company also received a $25 million corporate minority investment from Celgene in June.

In the second largest investment of the month, San Francisco-based InVitae received a $120 Series F investment from a group of more than 10 investors, including OrbiMed Advisors, Deerfield Management and Genesys Capital. InVitae aims to make genetic information more readily available to patients and clinicians.

The third largest investment of the month was a $100 million corporate minority investment in Chinese app developer Guahoa Technologies by Tencent, China’s largest Internet Service Portal. Guahoa operates Weiyi, a pair of mobile apps the connect patients and doctors.

MediGain, the sole revenue management software provider included in this month’s list, received the fourth largest investment of the month. The Plano, TX-based company received a $38 million investment from Prudential Capital Group in an unattributed round.

The fifth largest investment was in Bethesda-based TelCare, which has developed and is marketing an FDA-cleared cellular blood glucose meter. The device is part of an ecosystem of care for diabetes patients. Norwest Venture Partners, Sequoia, Qualcomm and Mosaic Health Solutions participated in the $32.5 million Series C investment.

Tying for the sixth largest investment of October, two companies that aim to make patients’ lives easier by bringing a degree of self-service to healthcare delivery raised $30 million each.

Based in Mississauga, Canada, MedAvail Technologies, which deploys kiosks that allow patients to fulfill prescriptions or obtain OTC medicines at remote locations, received $30 million in a Series C financing from a syndicate of investors, including Deerfield Management, Redmile Group, Adage Capital Management, Walgreens, Alliance Boots and Pura Vida Investments.

And New York City-based Phreesia, a point-of-service internet-based software platform that provides self-service solutions for patient intake and education, received a $30 million private equity investment from LLR Partners.

Also tying for the next largest investment in October were Denver-based SaaS provider WellTok and Bellevue-based Limeade with both raising $25 million.

WellTok, the developer of a channel that connects payers and providers with their members and rewards members for healthy behavior, received $25 million in a Series D round led by Bessemer.

And Limeade, which provides an employee engagement platform centered on health and wellness, received an investment from TVC Capital and Oak HC/FT Partners in a growth equity round.

Rounding out the 10 largest investments of October, San Francisco-based Strava, an online network for athletes, raised $18.5 million in a Series C financing from Sigma Partners, Sequoia and Madrone Capital.

This article was first published on the Law.com Network on December 2, 2014.

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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