startup health insights midyear venture funding report

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StartUp Health Insights: 2014 Midyear Report © 2014 StartUp Health, LLC A StartUp Health Insights Report Visit startuphealth.com/insights for more funding data Published: July 2, 2014

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Report covering all fundraising activity amongst digital health startups and investors

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StartUp Health Insights: 2014 Midyear Report

© 2014 StartUp Health, LLC

A StartUp Health Insights Report Visit startuphealth.com/insights for more funding data

Published: July 2, 2014

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

DIGITAL HEALTH CONTINUES TO ACCELERATE

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Funding into the digital health sector continues to accelerate, with the first half of 2014 already surpassing total funding in 2013. There were 248 deals in the first half of the year, raising a combined total of $3.3 billion. Interesting trends to pay attention to for the rest of the year and beyond: !• Deal Size: Investment size continues to increase and while the IPO market is early, we are starting to

see liquidity events for investors.

• Regional Funding: While the largest sources of capital are still the Bay Area, NYC and Boston, startups are launching and receiving funding all over the country (and world). StartUp Health company Aver Informatics out of Columbus, OH, recently raised $8.5 million from Columbus-based Drive Capital and GE Ventures.

• Global Innovation: There are over 5,000 startups across the globe that are developing novel technologies in digital health based on data from the StartUp Health Network. The StartUp Health Academy is no exception to global innovation, with 71 companies from 7 countries.

• New Entrants: Samsung, Google and Apple have all recently announced major health technology initiatives. This will further accelerate innovation and investment activity in the digital health sector with new applications and devices that can further leverage the platforms.

• Wave of Active Health Consumerism: As a result of high-deductible plans, price transparency and new market solutions, populations are becoming more informed and empowered.

• Consolidation: Massive consolidation of healthcare systems and providers markets is expected.

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

Fund

ing

($B

)

$1B

$2B

$3B

$4B

Dea

ls

150

300

450

600

2010 2011 2012 2013 1H 2014

Deals Funding

$3.3B$2.8B$2.2B$1.6B$1.1B

248

580

447

242

142142

242

447

580

248

Funding in digital health continues to accelerate, with 1H 2014 surpassing total 2013 funding

DIGITAL HEALTH DEALS & FUNDING

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Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

Funding in the New York metropolitan area nearly tripled from 1H 2013 to 1H 2014, as regional startup ecosystems develop across the nation

MOST ACTIVE U.S. REGIONS IN 1H 2014

$712M

$501M

$326M

$121M

$100M

$113M

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Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

FUNDING IN TOP MARKETS 1H 2014

Many of the top funded markets in 1H 2014 already surpassed funding totals for 2013

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Fund

ing

($M

)

$275M

$550M

$825M

$1,100M

$380M$478M

$716M

$925M$1,037M

Big Data & Analytics

Navigating the Care System

Practice Management

Diagnostics Consumer Health

*Denotes percent growth from market funding in 2013

+54%* +89%* +114%* +38%* —

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

Practice Management !$550M*

LARGEST DEALS IN 1H 2014

Clinical Decision Support !$135M

Care Management !$130M

Population Health !$125M

Sensors !$120M

Diagnostics !$105M

Big Data !$100M

Workflow Systems !$89M

Insurance Provider !$80M

Practice Management !$78M

*Strategic growth equity investment

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Genomics !$70M

Benefits Management !$67M

Clinical Trial Support !$61M

Physician Collaboration !$54M

Practice Management !$51M

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

2010

2011

2012

2013

1H 2014

0% 25% 50% 75% 100%

Seed Series A Series B Series C Series D Series E Series F

Mid-stage* deals show consistent growth year-over-year, as 30% of companies receive follow-on funding in 1H 2014

DEALS BY STAGE

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*Mid-stage deals include Series B and Series C

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

$0M

$4M

$8M

$12M

$16M

2010 2011 2012 2013 1H 2014

MEDIAN ROUND BY STAGE

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-27%61%79%4%83%

Seed Series A Series B Series C Series D

CHANGE IN MEDIAN DEAL SIZE FROM 2013

There was an 83% increase in the median size of seed deals between 2013 & 1H 2014

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

MEDIAN DEAL SIZE

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$1M$2M$3M$4M$5M

2010 2011 2012 2013 1H 2014

MEDIAN DEAL SIZE BY ROUND

$8.0M$15.0M$12.2M$4.0M$1.2M

Seed Series A Series B Series C Series D

Total median deal size in 1H 2014 increased by 150% since last year

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

MOST ACTIVE VCs IN 1H 2014

6

5

5

4

4

4

4

10

Number of Deals

10 VCs

26 VCs

3

2

120 VCs 1

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

DIGITAL HEALTH IPOS IN 1H 2014

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Practice Management !

$75M

Big Data !

$1.3B

Consumer Health !

$110M

Benefits Management !

$177M

Source: StartUp Health Insights | www.startuphealth.com/insights Disclosure: Information, data and figures represent publicly available data. © 2014 StartUp Health, LLC

STARTUP HEALTH PORTFOLIO NOW 71 COMPANIES

ACQUIRED COMPANIES

24 companies added during 1H 2014

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ABOUT STARTUP HEALTH

StartUp Health, a global startup platform accelerating innovation in health and wellness, represents a new model for helping entrepreneurs succeed in the health sector. StartUp Health is on a mission to inspire, educate and help 1,000 health startups to reimagine and transform healthcare over the next decade. !StartUp Health was founded by health tech entrepreneurs Steven Krein and Unity Stoakes and is chaired by former Time Warner CEO, Jerry Levin. The organization’s investors include leading health, technology, and business minds, including Steve Case, Mark Cuban, Esther Dyson, Roger Ehrenberg, Brad Feld, Richard Forman, Jason Finger, Linda Holliday, Jon Kaplan, Howard Krein, MD, PhD, Jon Miller, Jeff Stewart and Wayne Kimmel. !Learn more and apply at startuphealth.com/apply and follow @startuphealth. !!!!!!!!Report authored by: Kiyan Rajabi, Tanner Yager and Brian Edwards

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StartUp Health Insights: 2014 Midyear Report

© 2014 StartUp Health, LLC

A StartUp Health Insights Report Visit startuphealth.com/insights for more funding data

Published: July 2, 2014