Healthcare IT VC Funding Totals $737 Million in Q3 2013, Reports Mercom Capital Group

AUSTIN, TX--(Marketwired - Oct 15, 2013) - Mercom Capital Group, llc, a communications and consulting firm, today released its report on funding and mergers and acquisitions (M&A) activity in the Healthcare Information Technology (IT) sector for the third quarter of 2013.

Venture capital (VC) funding in the sector continued to rise in Q3 2013 with $737 million (M) in 151 deals compared to $623M in 168 deals in Q2 2013. Year to date, the Healthcare IT sector has raised a disclosed $1.85 billion (B).

Chart-Healthcare IT VC Funding Q3 2013: http://mercomcapital.com/assets/images/Charts/HIT-Q3-2013/Chart_1.png

While the 2009 HITECH Act helped launch the sector through its $17B allocation towards the adoption of meaningful use of healthcare IT, private investments into the sector have continued to rise with increasing EHR adoption.

"Funding into Healthcare IT is on pace to double over last year," said Raj Prabhu, CEO of Mercom Capital Group. "With major parts of the Affordable Care Act on the horizon, the focus is on health insurance exchanges, preventative care, wellness, population health, and a general shift from quantity to quality of care, which is reflected in this quarter's funding transactions."

Healthcare practice-focused technology companies received $489M in 59 deals with population health, EHR/EMR, practice management, and data analytics companies all receiving attention this quarter.

Consumer-focused companies received $248M in 92 deals, with most funding ($161M) going to the mobile health category, with mobile health apps and sensors receiving the most funding this quarter.

Top VC funding deals in Q3 2013 went to Evolent Health, which raised $100M from The Advisory Board Company, UPMC Health Plan and TPG Growth, Practice Fusion, which raised $70M from Kleiner Perkins Caufield & Byers, OrbiMed Advisors, Deerfield Management Company, Industry Ventures, Artis Ventures, Morgenthaler Ventures, Felicis Ventures, Glynn Capital Management, Band of Angels Acorn Fund, H Barton Co-Invest Fund, and Goldcrest Investments, MedSynergies, raised $65M from undisclosed investors; Fitbit raised $43M in private equity financing from Qualcomm Ventures, SAP Ventures, SoftBank Capital, Foundry Group and True Ventures; and Oscar raised $40M from Thrive, Founders Fund, General Catalyst, and Khosla Ventures.

Chart-Healthcare IT Top VC Deals: http://mercomcapital.com/assets/images/Charts/HIT-Q3-2013/Chart_2.png

There were a total of 168 investors in Q3 2013. Kleiner Perkins Caufield & Byers and The Social+Capital Partnership were the most active investors and participated in four deals each. The remaining top investors participated in three deals apiece. They included FirstMark Capital, Founders Fund, HLM Venture Partners and Khosla Ventures.

Mergers and acquisitions (M&A) in Healthcare IT totaled $1.1B in 45 transactions. The most active categories for M&A transactions included revenue cycle management with nine, followed by practice management with eight, and telehealth with four transactions.

The top M&A transactions in Q3 2013 were the $644M merger of Greenway Medical Technologies and Vitera Healthcare Solutions, the $200M acquisition of Medical Management Professionals (subsidiary CBIZ) by Zotec Partners, and the $200M acquisition of Cardiocom by Medtronic.

There were a total of 412 companies and investors mentioned in this report.

Get the report: http://store.mercom.mercomcapital.com/products-page/healthcare-it-reports/hit-q3-2013-funding-ma-report/

About Mercom Capital Group
Mercom Capital Group, llc is a communications and consulting firm focused on Healthcare IT, cleantech and financial communications. Mercom's consulting division advises companies on new market entry, overall strategic decision-making, and provides custom market research. Mercom delivers highly respected industry market intelligence reports covering Healthcare IT, Solar Energy, Wind Energy and Smart Grid. Mercom's communications division helps companies and financial institutions build powerful relationships with media, analysts, local communities and strategic partners. About Mercom: http://www.mercomcapital.com. For Mercom's market intelligence reports: http://mercomcapital.com/market_intelligence.php.