By the Blouin News Science & Health staff

Health tech sees boom in funding

by in Medicine.

FREDERIC J. BROWN/AFP/Getty Images

FREDERIC J. BROWN/AFP/Getty Images

As technological investments in health-based devices and services advance, investments in healthcare technology from venture capitalists continue to grow. Aside from the much-popularized efforts of tech giants such as Google and Samsung to develop mobile health initiatives and devise internet-connected tools to improve healthcare for professionals and enable more access to care, smaller startups are seeing funding as well. A new Mercom Capital Group report took stock of the global investments in health IT funding, and found that venture capital funding soared to $1.8 billion in 161 deals in the second quarter of 2014.

VISUAL CONTEXT: TOP HEALTH IT DEALS

Source: Mercom Capital Group

Source: Mercom Capital Group

These figures are more than double the $861 million raised in 164 deals in the first quarter of this year. The U.S. does lead the way for most of these deals, with U.S. companies raising $1.6 billion of the $1.8 billion total, with 140 deals in total; 47 came out of California, followed by New York with 12. But 13 other countries recorded at least one deal.

Another intriguing point is that the $2.6 billion raised so far this year has already exceeded the $2.2 billion raised in total in 2013. Clearly, the interest in health-based technologies is on an unprecedented rise, and from all sides of funding houses. Crowdfunding has traditionally not been thought of as a serious venue for healthcare organizations, but it is a new, alternative avenue for some startups today.

The MedCity News’ CONVERGE conference in Philadelphia, Pennsylvania this week discussed the future of funding streams for healthcare startups. Some startups are looking towards grant funding after receiving venture capital, in a move away from traditional methods of seeking investment. MedCity News quotes Tom Vanderheyden, vice president of business development and commercialization for UnitedHealthcare: “I’m now seeing companies take a couple hundred thousand in angel round to get started, and then focus on grant funding. I’ve seen a fair amount of success in that – it’s a meaningful enterprise that’s generating a lot of IP.”

The tech giants are certainly helping push forward the investment in health-based technologies, though. Google Ventures led a $130 million round of funding in big data cancer treatment firm Flatiron Health earlier this year. Indeed, that deal was one of the top deals listed by Mercom in Q2. As large firms and private investors alike take more of a shine to the work done in the health tech sector, no doubt innovative projects are on the horizon.