Digital Health Investments Top $2.6B* in the First Six Months of 2014

by Fenwick & West Life Sciences Group

Thanks to an impressive showing in April, digital health investment in the first half of 2014 totaled $2.676 billion. There were a total of 38 deals for $20 million or more from January through June, with more than two-thirds of the $20 million-plus investments occurring in Q2.

Three of the top ten investments in June went to therapeutic focused companies, including the biggest round of the month, a $120 million Series G round for Proteus Digital Health. As we noted in an earlier post, Proteus closed one of the largest digital health investments in 2013 with a $45 million Series F round. The company has an FDA-approved ingestible sensor product and is building out additional products based on that same core technology. Investors in the latest round were not disclosed.

The second largest round of the month went to Zenefits, an online platform for benefits, payroll and other HR services. The company closed a $66.5 million Series B financing that included SV Angel, Horowitz and Institutional Venture Partners.

Grand Rounds received the third largest investment in June in a Series B round led by Venrock, Greylock Partners and Harrison Metal. The cloud-based software company provides an outcomes management platform that employers can make available to their employees.

As Tech Crunch recently noted, women’s health apps have drawn a lot of investor interest. There are two women’s mHealth companies among the top ten investments in June. Meets You is a mobile health tracking application and social media platform for women, which is based in Xiamen, China. Matrix Partners China, SIG Asia Investments and K2 Ventures participated in the $35 million Series C round.

Ranking fifth among June investments was Chrono Therapeutics, a drug delivery company. Its wearable drug delivery technology allows for tailored timing and dosage of drugs. Chrono received a Series A investment totaling $32 million. Investors included Canaan Partners, Fountain Healthcare Partners, 5AM Ventures, Mayo Clinic and GE Ventures.

The sixth largest investment of the month went to another women’s mobile health tracking company from China. The Beijing company, Kang Zhi Le Si Network, took in $30 million in a Series C round from Ceyuan Ventures, Sequoia Capital China and Bertelsmann Asia Investments. This investment comes on the heels of a $20 million round that the company received in May.

NantHealth, a cloud-based clinical operating software provider that received a $100 million investment in May from a sovereign wealth fund, received a corporate minority investment in June for $25 million from Celgene.

The next largest investment was a $24.2 million venture debt investment from Hercules Technology Growth Capital. The financing went to CareCloud, a cloud-based EMR and practice management software provider headquartered in Florida.

Definiens provides image analysis and data mining solutions for life sciences companies. The Big Data company based in Munich, Germany received a $20.4 million Series C investment that included Cipio Partners, Wellington Partners, TVM Capital and Glide Healthcare Partners.

Rounding out the top ten for June is Senseonics, a Maryland-based company that is developing a fully-implantable glucose monitoring system. New Enterprise Associates, HealthCare Ventures, Delphi Ventures, Anthem Capital and Greenspring Associates participated in the $20 million Series E round.

*Note: This aggregate dollar investment amount includes private equity financings only. It excludes public offerings, debt offerings/facilities and convertible debt transactions.


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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