Venture Capital Activity in the Healthcare IT Industry – February 2015

by Emily Forbes

  • 12 Feb 2015
  • PE
  • VC

Preqin’s Venture Deals Analyst online service contains information on 883 venture capital deals completed in the healthcare IT industry since 2007, worth an aggregate value of $4.5bn. The industry has seen significant growth in the number and aggregate value of deals taking place in this period, from 45 investments valued at an aggregate $268mn in 2007, to 215 venture capital financings valued at $1.5bn in 2014, an increase of 378% and 460% respectively. From 2008 to 2013, the aggregate value of venture capital deals in healthcare IT, as a proportion of all healthcare venture capital financings, increased gradually from 2% to 6%. Yet in 2014 there was a comparatively large increase of five percentage points to 11%. A similar trend was observed in the number of healthcare IT deals as a proportion of all healthcare venture capital investments: the industry saw an increase from 4% in 2007 to 8% in 2011, and jumped to 19% in 2014.

Angel/seed financings account for the largest proportion of the number of deals that have taken place since 2007 in the healthcare IT industry. There have been 237 such deals with an aggregate deal value of $140mn, contributing 24% of the number and 3% of the aggregate value of all healthcare IT deals.  

North America has dominated the healthcare IT industry, accounting for 85% of all healthcare IT deals occurring since 2007, much higher than the 63% of venture capital deals across all industries accounted for by the region. The aggregate value of healthcare IT deals in the region constituted 91% of the global value of healthcare IT investments, which is again significantly higher than the proportion that North American venture capital deals accounted for across all industries (67%). Europe recorded the second largest number of deals since 2007, at 75 (8% of the total), in contrast to North America’s 753. Other regions outside North America and Europe have accounted for only 7% of the number of deals and 6% of aggregate deal value in healthcare IT since 2007.

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