Digital Health VC Funding Hits $2 Billion in Q1 2019 - Report

Mercom Capital Group, llc, a global communications and research firm, released its report on funding and merger and acquisition (M&A) activity for the Digital Health (Healthcare Information Technology) sector for the first quarter of 2019. Mercom’s comprehensive report covers deals of all sizes from across the globe.

Venture capital (VC) funding, including private equity and corporate venture capital into Digital Health (Healthcare IT) companies in Q1 2019, came to $2 billion in 149 deals compared to $1.4 billion in 142 deals in Q4 2018. VC funding in Q1 2019 was down 19% compared to the same quarter of last year (Q1 2018) when nearly $2.5 billion was raised in 187 deals.

Digital Health companies have brought in over $37 billion in disclosed VC funding since 2010.

Total corporate funding for Digital Health companies - including VC, debt, and public market financing - totaled $2.2 billion in Q1 2019.



“Funding levels were down compared to last year in Digital Health in the absence of larger deals. M&A activity was also flat. However, Digital Health public equities experienced a turnaround in Q1 with 66% of them beating the S&P 500 compared to Q4 2018 when 63% of the equities we tracked performed below the S&P 500. Favorable market conditions have prompted several companies to announce IPO plans,” said Raj Prabhu, CEO of Mercom Capital Group.



The top funded categories in Q1 2019 were: $557 million raised by Data Analytics companies, mHealth Apps with $392 million, Telemedicine with $220 million, Healthcare Booking with $177 million, Clinical Decision Support with $107 million, Mobile Wireless with $90 million and $80 million for Healthcare IT Service Providers.



There were 48 early-round deals in Q1 2019.

The top VC deals in Q1 2019 included: $170 million raised by Doctolib, $100 million from Health Catalyst, $88 million raised by Calm, and $80 million by Taimei Medical Technology.



A total of 371 investors participated in funding deals in Q1 2019 compared to 412 investors in Q1 2018. There were 16 FDA and CE approvals issued to Digital Health companies in Q1 2019.

Digital Health VC funding deals were distributed across 17 countries in Q1 2019.

In Q1 2019, there were 45 M&A transactions (seven disclosed) involving Digital Health companies compared to 48 M&A transactions (13 disclosed) in Q1 2018.

Practice Management Solutions companies led M&A activity with five transactions followed by Data Analytics companies with four transactions. Companies providing Clinical Decision Support, Electronic Medical Records, and Emergency Department Information Systems had two transactions each. There was one transaction each recorded by companies offering Asset Tracking, Document Management, Long-Term and Post-Acute Care, and Medical Imaging.

The top disclosed M&A transactions included the $195 million acquisition of Voalte by Hill-Rom Holdings, followed by BioTelemetry’s acquisition of Geneva Healthcare for $65 million. Alphabet's Google acquired Fossil Group’s intellectual property related to a smartwatch technology currently under development for $40 million, Netmeds acquisition of KiViHealth for $10 million and Livongo Health’s acquisition of myStrength for $10 million.

A total of 610 companies and investors were covered in this report.

10 Must Know Startup News From The Week Gone By [03 - 08 July]

Missed the happening of startup world? Here is the recap for you. Mentioned below are the 10 news which made buzz during in the week gone by.

Homegrown E-commerce Giant Snapdeal Rejects Flipkart’s $850 Mn Buyout Offer

Flipkart, Snapdeal merger is taking twist and turns with time. Recently, Jasper Infotech owned Snapdeal’s board has refused the initial offer by Flipkart. E-commerce major, Flipkart has completed the due diligence process and has made an offer of $800-850 million to buy Snapdeal. But Snapdeal’s board felt that offer made by Flipkart undervalued the company. Snapdeal’s largest investor, SoftBank has been proactively mediating the sale for the past few months.

India, Israel Launches 5 Year Technology Fund

Prime Minister Narendra Modi’s visit to Israel has become the buzz of the town. The PM visit to Israel has further strengthen the relation between two nation by announcing the launch of a technology fund, the Israel India Innovation Initiative Fund, or I4F. The fund will focus towards growing the two countries’ business relations. In addition to the tech fund, the two countries also signed a total of seven accords aimed at boosting India and Israel’s cooperation in a number of crucial sectors right from agriculture and water to space research etc.

Not only this, the two countries have unveiled a bilateral innovation challenge that will see Indian and Israeli startups coming together to conceive solutions to fight some of the most critical challenges that the world is facing right now like water, agriculture and digital healthcare etc. The bilateral innovation challenge will be hosted on a new online platform called the India-Israel Innovation Bridge.

VC Investments in Startups Lowest in Last 3 Years, Decline By 25%

As per a report by Venture Intelligence, a research firm led by media entrepreneur Arun Natarajan, the quarter ending June saw venture capital investments in Indian startups decreasing by 25 percent from the figure locked in a year ago. The report highlighted that the venture capital investment amount in startups in India has decreased to $275 million in 78 investments from last year’s figure of #309 million in 104 deals. Venture Intelligence, which is considered as a leading source of information and analysis on private company financials, transactions and their valuations in India, also revealed that the June quarter was the lowest VC investment quarter seen by the Indian startup ecosystem in the last three years period.

WeWork Launches First Collaborative Work Space in Bengaluru

New York-based collaborative workspace, WeWork has launched its first community workspace in Bengaluru – ‘WeWork Galaxy’. WeWork targets two new centers’ in Koramangala and Whitefield respectively. The Bangalore launch also coincides with the opening of first location in Brazil (Sao Palo).

WorkSpace is well equipped to cater to 2200 members, powered by beautiful, functional work spaces, swimming pool and gym. The company is aiming to reach out to entrepreneurs, freelancers, SMEs and SMBs, startups across e-commerce, IT/ITES, retail, FMCG, healthcare, legal, and marketing segments amongst others.

Numaligarh Refinery To Assist Startups in Assam

Assam-based Numaligarh Refinery Limited (NRL) has decided to promote startups in Northeast India region. If we talk of the funds, initially, to assist startups, company has come up with a fund of Rs 10 Crore which will come as a grant for startup venture. Commenting on the development, P.Padmanabhan, Managing Director, NRL said, “We want to create entrepreneurship ecosystem in Northeast India. Once the ideas are submitted, jury will evaluate the same. We will evaluate if the project requires seed funding, scale up funding or any other assistance. We will tie up with incubation Centre.”

Flipkart Executives To Deliver Packages To Customers

E-commerce major, Flipkart has recently flagged off a program where its employees will visit customers across the Indian subcontinent in the month of July as a part of the company’s 10th anniversary celebrations. As a part of the program, Flipkart’s top executives, which includes its CEO Kalyan Krishnamurthy, and its employees across business functions will get an opportunity to personally visit a customer, especially in tier 2, 3 and 4 towns like Bhopal, Patna, Amritsar, Vijaywada, Guwahati, Cuttack, Nashik and Jamnagar to thank them for supporting the company for ten long years.

Shamik Sharma To Join pi Ventures As Venture Partner

Early stage venture fund, pi Ventures has appointed Shamik as a Venture Partner. He was previously the Chief Product and Technology officer at Myntra where he was responsible for driving technology strategy and culture. At pi Ventures, Sharma will work with portfolio founders to help them get past critical hurdles, design their product roadmaps and hire specialised talent. His role will involve supporting pi Ventures in deep understanding of technology and IP via technology deep dives of prospective portfolio companies and support in bringing interesting startups aligned with pi Ventures’ investment theme to their deal pipeline.

Capsula.Studio to Set Up a Startup Accelerator

Capsula.Studio at Tel Aviv University has partnered with a commercial vehicles seating and interiors company, Pinnacle Industries, to establish a startup accelerator, Pinnacle Capsula.Studio in Pune. The partnership aims to accelerate innovative entrepreneurs to market through Capsula’s proven ‘Mentored Customer Validation’ program and knowledge center which connect entrepreneurs with global value network players and the research community.

The Studio has been conceived as a not-for-profit entity which will be located at The BHAU Institute which is a part of the College of Engineering. It will act as a bridge between Indian and Israeli entrepreneurs and will allow novel ideas rapidly gain market traction.

Housing’s Rahul Yadav Joins ANAROCK Property Consultants

ANAROCK Property Consultants, which prominent real estate industry stalwart Anuj Puri launched last month has appointed Housing.com’s co-founder and ex-CEO Rahul Yadav as Chief Product & Technology Officer. Yadav’s experience in harnessing the consumer housing market at via technology will add the key element to the business.

Yadav, who will be based out of ANAROCK’s Mumbai offices in Bandra-Kurla Complex, assumes his new role from July first week and is already building his team of product and technology experts.

Edtech Startup BYJU’S Acquires TutorVista And Edurite

The creator of K-12 app, BYJU’S has acquired TutorVista and Edurite from Pearson. The partnership is focused on expanding international reach and creating a diverse product portfolio. Launched in 2015, BYJU’s has become one of the preferred education app for students across age groups with 8 million users and 4,00,000 annual paid subscriptions. With an average time of 40 minutes being spent by a student on the app every day from 1700+ cities and towns, the BYJU’S app is making learning enjoyable and effective. BYJU’S is making learning contextual and visual, and not just theoretical.

Investments In Indian Startups Decline By 24%

The wheels are showing signs of slowing down in the startup industry and this is clearly evident in the way investors are pulling from the market and startups are struggling to raise cash. According to statistics, the amount of money invested by VCs has been going down for the last three-quarters continuously. The first quarter of 2016 were already down by 24% compared to December last year. Companies like KPMG have stated that Indian investment has continued to decline due to hesitation on the part of the investors. After the whopping 9 million dollars in the Indian silicon valley in the beginning of 2014, investment began to slow down, with investors being unsure to part with their money.

The bigger fish here is also struggling to find food. There have been reports that Flipkart and snap deal have had many meetings with potential investors for funding and none of the deals fell in place. There are various reasons for this slowdown. One major reason being that startup burning cash to give away discounts and lucrative deals and still not being able to generate a brand value or create loyal customers from their end.

The problem is not just limited to India, rather it originated in the USA and has come down from there. Startup deals in the US have also seen a drastic decline since the first quarter of 2015. Some reason for this that have come to light are Some of the factors driving VC investors to take a more measured investment approach include an economic slowdown in China, rising interest rates, and an approaching election in the US and a June referendum over the UK’s future in the European Union.

As if this wasn't enough trouble for the startups, the new regulations by the government are just putting that much more pressure on the startups here. Either the startups will have to get the stamp of approval or find new and innovative ways to get around them. The major three conditions attached by the government are . One, no group company or seller on a marketplace can contribute more than 25% of the sales generated. Two, marketplaces cannot influence product prices. Three, small sellers will now have to take responsibility for quality of goods and after-sales support.

With this slowdown, startups have started to keep a check on their spending habits and are saving money for the rough times to come. On this side where even the unicorns in India are struggling to keep it together there is no saying, what this storm will do the new and small companies which have started pretty recently.

 

Investments In Indian Startups Decline By 24%

The wheels are showing signs of slowing down in the startup industry and this is clearly evident in the way investors are pulling from the market and startups are struggling to raise cash. According to statistics, the amount of money invested by VCs has been going down for the last three-quarters continuously. The first quarter of 2016 were already down by 24% compared to December last year. Companies like KPMG have stated that Indian investment has continued to decline due to hesitation on the part of the investors. After the whopping 9 million dollars in the Indian silicon valley in the beginning of 2014, investment began to slow down, with investors being unsure to part with their money.

The bigger fish here is also struggling to find food. There have been reports that Flipkart and snap deal have had many meetings with potential investors for funding and none of the deals fell in place. There are various reasons for this slowdown. One major reason being that startup burning cash to give away discounts and lucrative deals and still not being able to generate a brand value or create loyal customers from their end.

The problem is not just limited to India, rather it originated in the USA and has come down from there. Startup deals in the US have also seen a drastic decline since the first quarter of 2015. Some reason for this that have come to light are Some of the factors driving VC investors to take a more measured investment approach include an economic slowdown in China, rising interest rates, and an approaching election in the US and a June referendum over the UK’s future in the European Union.

As if this wasn't enough trouble for the startups, the new regulations by the government are just putting that much more pressure on the startups here. Either the startups will have to get the stamp of approval or find new and innovative ways to get around them. The major three conditions attached by the government are . One, no group company or seller on a marketplace can contribute more than 25% of the sales generated. Two, marketplaces cannot influence product prices. Three, small sellers will now have to take responsibility for quality of goods and after-sales support.

With this slowdown, startups have started to keep a check on their spending habits and are saving money for the rough times to come. On this side where even the unicorns in India are struggling to keep it together there is no saying, what this storm will do the new and small companies which have started pretty recently.

 

SoftBank Will No Longer Invest In New Startups; To Wind Up Its VC Arm

According to a recent report on a website, Japan based SoftBank Corp., which is known in India for its generous investments in several Indian startups, is planning to close down its venture capital arm and avoid making risky investments in early stage startups. It plans to shift its focus from early stage to more established and less risky companies.

By pulling the plug on SoftBank Capital, the parent company has decided to ditch the approach that resulted it in yielding record returns in China based Alibaba Group, one of the world’s most valuable Internet companies now. SoftBank Capital was one of the initial backers of the China based Internet startup in 2000 when the startup was just a year old.

The Japanese based firm is the biggest investor in two of India's most valuable and famous startups, cab hailing service app Ola and e-commerce site Snapdeal. SoftBank has already invested more than $1 billion in these two startups till date.

According to SoftBank president Nikesh Arora's statement to a website, “As we look at the future for the next tens of years, we believe that the way to preserve the long-term sustainability of SoftBank is to be large, minority shareholders of many assets. We believe that it’s less crowded in the large-check marketplace."

“As we build SoftBank 2.0, we increasingly believe that our future lies in a smaller universe of companies, which pioneer breakthrough innovation and have the potential to be market and category leaders,” said a spokesperson for the Japanese firm. “We want to work with them closely and guide and support them to success, as we have done with Snapdeal and Ola, and many others. We also think having a diversified portfolio including mature companies and in some cases, exceptional early-stage companies, is key to SoftBank’s long-term viability. We continue to be very excited by the possibilities that India offers.”

SoftBank Capital’s early-stage team, will not raise any new funds and nor make any new investments out of its $100 million 2014 investment fund. It will, however, continue making follow-on investments in current portfolio companies.

How does SoftBank's this change in strategy going to affect India is a little early to predict. Keep watching this space to know more on the same.

VC Investment In Indian E-Commerce Crosses $1bn in 2014

The Indian ecommerce scene is growing like never before and everyone is trying their level best to reap in as much profits as possible. This rapid growth in the Indian ecommerce market has already pushed the early stage venture capital investment above $1 billion in 2014. Both the US based and domestic funds are hoping that the local startups will be able to replicate China’s technology businesses rapid growth.

All the enthusiasm of the investors has been drawn by the ongoing and growing battle between the United States big online retailer Amazon and local biggies such as Flipkart. The US retailer is currently in plans of investing around $2 billion the third largest economy in Asia. On the other hand, Flipkart is currently valued at around $7 billion, all thanks to a $1 billion funding round earlier this year.

According to figures released from Ernst and Young, the consultancy, a number of smaller deals in areas ranging from mobile application development to consumer ecommerce have also contributed in pushing the early stage VC above the $1 billion mark in just first nine months of this year. This is the first time since 2007 that India has been successful in crossing the $1 billion mark. The figure was a mere $634m last year.

According to data collected from other sources like Thomson Reuters Datastream, venture investment into Indian software, which is a category that does not include sectors such as retail or biotechnology, reaching $810m so far in 2014. This figure is a marked improvement from the 2013 $100m figure.

According to Shailendra Singh’s statement to the Financial Times, there is an unprecedented growth in the ecommerce sector. Singh is the Managing director at Silicon Valley fund Sequoia Capital, which is one of the high profile investors in Indian Startups. He also added, "There is a lot of money flooding in…but it is also coinciding with some dramatic usage statistics as adoption of technology increases, not just by consumers but also by businesses".

India has as a reputation of being the world's technology hub, mostly because of the prominence of companies such as Wipro and Infosys. Many top notch multinationals of the world also make use of the country for software development and research.

Internet usage also supports the investment boom to a large extent. By 2020, India is projected to have more than 500 million Smartphones users, which is a great sign.

VC Investment In Indian E-Commerce Crosses $1bn in 2014

The Indian ecommerce scene is growing like never before and everyone is trying their level best to reap in as much profits as possible. This rapid growth in the Indian ecommerce market has already pushed the early stage venture capital investment above $1 billion in 2014. Both the US based and domestic funds are hoping that the local startups will be able to replicate China’s technology businesses rapid growth.

All the enthusiasm of the investors has been drawn by the ongoing and growing battle between the United States big online retailer Amazon and local biggies such as Flipkart. The US retailer is currently in plans of investing around $2 billion the third largest economy in Asia. On the other hand, Flipkart is currently valued at around $7 billion, all thanks to a $1 billion funding round earlier this year.

According to figures released from Ernst and Young, the consultancy, a number of smaller deals in areas ranging from mobile application development to consumer ecommerce have also contributed in pushing the early stage VC above the $1 billion mark in just first nine months of this year. This is the first time since 2007 that India has been successful in crossing the $1 billion mark. The figure was a mere $634m last year.

According to data collected from other sources like Thomson Reuters Datastream, venture investment into Indian software, which is a category that does not include sectors such as retail or biotechnology, reaching $810m so far in 2014. This figure is a marked improvement from the 2013 $100m figure.

According to Shailendra Singh’s statement to the Financial Times, there is an unprecedented growth in the ecommerce sector. Singh is the Managing director at Silicon Valley fund Sequoia Capital, which is one of the high profile investors in Indian Startups. He also added, "There is a lot of money flooding in…but it is also coinciding with some dramatic usage statistics as adoption of technology increases, not just by consumers but also by businesses".

India has as a reputation of being the world's technology hub, mostly because of the prominence of companies such as Wipro and Infosys. Many top notch multinationals of the world also make use of the country for software development and research.

Internet usage also supports the investment boom to a large extent. By 2020, India is projected to have more than 500 million Smartphones users, which is a great sign.