In what has become a persistent trend that we’ve covered in detail over the past six months in our 2020 Year end review and 2021 Q1 Review and Roundup, the Digital Health Technology industry continues to be on an investment tear in the first half of 2021.
Digital Health Investment in 6 months of 2021 exceeds the record total of 2020
For the first half of 2021 digital health funding, at $14.7B, has already surpassed the total for all of 2020, which was at that time a record high amount of $14.1B. In total 372 deals were funded with an average deal size of $39.6M. Of these 48 deals were Mega Deals, which are deals over $100M in size, and accounted for 59% of total investment, illustrating a trend towards larger raises as firms are being positioned for the public markets.
Investor exits were also at a torrid pace in the first half of 2021 reflecting the investment markets reaching all time highs in value, IPOs and the new SPAC vehicle for going public. In the first half of 2021 there were 11 closed IPOs and SPACs in digital health and another 11 are expected to close in the second half of 2021.
Rock Health has compiled the data, conducted the analysis and provides significant insights into what is happening in the digital health investment space. View the Rock Health First Half Report for 2021:
H1 2021 Digital Health Funding: Another Blockbuster Year…In Six Months
Trends contributing to the explosive activity in digital health investment
Record investment performance of the type we are experiencing does not occur accidentally or regularly in any industry. In this case it seems to be the result of a confluence of factors that have created a virtuous cycle where macro and micro trends are self reinforcing to create and maintain the investment momentum.
We should expect that as long as these trends persist the activity may continue, but investors and market participants should remain aware as in frenzied investment climates at all levels (VC, Private, IPO, M&A) the overall activity, valuations and general excitement can get ahead of the fundamentals.
Some of the trends supporting the Investment activity:
- The COVID-19 pandemic has created an immediate and direct need and catalyst for all facets of digital health including telemedicine, telehealth, remote monitoring and much more.
- The rising stock market and technology investment overall provide a ready exit option for fast growth digital health companies that have raised multiple rounds in the recent past. IPOs and SPACs in all industries are taking place at a pace not seen in decades and digital health is participating strongly in that trend.
- Increasing focus on the sector by the Big Tech Giants and other tech leaders is fueling activity at all levels including M&A. Although the Tech Giants are still in the process of ‘figuring out’ their health strategies they are creating platforms to drive activity and innovation in the sector.
Montreal Digital Health Ecosystem News
There have also been many positive developments in the Montreal Digital Health Ecosystem with a number of companies garnering investments and other accolades, including some that we are proud to be working with such as Aifred Health and Ditch Labs. We look forward to their continued success.
- AlayaCare raises $225 million to accelerate the digital transformation of home health care.
- Montreal’s Aifred Health finished 2nd in the World in the IBM Watson AI XPrize competition winning the $1 Million Prize.
- Ditch Labs completed a $1.3 Million Seed Round to Solve Nicotine Addiction and Tobacco use.
- Esplanade Healthtech Ventures Announces Oversubscribed Closing of its Inaugural Digital Health Fund.
(If you wish to have your company news featured in our Montreal Digital Health Ecosystem roundup in the future please contact us).
Digital Health Activity by Big Tech
The ongoing expansion in activities by the Big Tech leaders into healthcare should be expected to continue due to some of the macro trends that have led to the explosion in investment: telehealth, telemedicine, consumer wearables, connected health, remote monitoring, IOMT, big data.
Big Tech firms such as Google and Apple are specially well positioned to take advantage of these opportunities as they control the point of access to the wireless devices that host many of the emerging telehealth remote monitoring applications that are growing the market, not to mention that in some cases, such as Fitbit, they actually own the devices.
We can see a future where Big Tech is the layer that sits between and manages the ocean of health data being generated by myriad wearable medical devices, including smartphones, and the medical establishment.
Some recent developments by the big technology majors:
- Microsoft has big plans for healthcare, and it’s taking a different path to the rest of big tech.
- Google’s new Dermatology Assist Tool is Using AI to help find answers to common skin conditions
- Apple advances personal health by introducing secure sharing and new insights
- AWS looks to digital health with new accelerator
In conclusion we can expect a continuation of the trends that have persisted in the the first half of 2021 to last throughout the year barring any major dislocation in the financial markets or other unexpected event (COVID-19 resurgence?). Too many deals are already in the pipeline and should be concluded in the second half of 2021. For now at least, let the good times roll.
About BML Technology
BML Technology understands digital health. At the intersection of medical technology, clinical research and patient-centric healthcare BML drives the mainstream adoption of digital technology in healthcare. Offering a full range of services to the digital health ecosystem BML manages the complex stakeholder interactions necessary to get digital health solutions to market and gain adoption.