Data summary: global digital medical financing declines in 2019

Recently, rock health and startup have released investment and financing reports in the field of digital healthcare in 2019 Similar to the statistical data of the arterial network, both institutions have observed a slight correction in the total amount of global healthcare financing in 2019 Arterial network compiles two reports Let's first look at the summary of rock health In the past decade, digital health has gained nearly one tenth of the total venture capital in the United States since the potential attention of investors In 2019, 359 digital health startups in the United States raised a total of $7.4 billion from 627 investors There are 112 transactions in 2019, and six digital medical companies enter the open market for the first time, but the trend of M & A in the industry is gradually decreasing Digital healthcare investment has declined In 2019, digital health startups in the United States raised a total of $7.4 billion, the second largest financing year in history For the first time since rock health began tracking the sector in 2011, the number of transactions has declined slightly After a 32% jump between 2017 and 2018, the industry's average deal size today fell to $19.8 million in 2019 Overall, digital health and healthcare related entrepreneurs are still making record breaking investments As expected at the end of 2018 (also a record breaking year), the growth trajectory of venture capital in the field of digital health care will slow down in 2019 Total investment is 10% lower than the record $8.2 billion in 2018 It can be said that this decline is due to a small decline in the number of late transactions in 2019 At the end of 2018, two late deals accounted for $800 million of total funds But the two companies that successfully IPO in 2019 (peloton and livongo) raised a total of $655 million in 2018, accounting for 80% of the difference between 2018 and 2019 So 2020 will also tend to slow down rather than decrease In 2019, nearly 60% of active investors had previously invested in the digital healthcare industry Compared with the first-time investors, many investors have repeatedly invested in the field of digital health care in the past four years, but the proportion of second-time investors has reached a new high, including independent, non corporate venture capital funds and private equity (PE) investment institutions 1 Venture capital (VC) institutions, all stages of general investment enterprises (from seed to D + round) In 2019, 62% of venture investors are repeat investors, At the same time, since 2014, more than 50% of venture investors are repeat investors 2 Enterprise venture capital (CVC), mainly invested in the medium-term (B +) and later stages In 2019, 64% of CVCs are repeat investors, Since 2018, more than 50% of CVCs have been repeat investors 3 Private equity (PE), growth, hedge funds and asset management companies, mainly invested in the later stage (D + round) In 2019, 56% of late stage investors are repeat investors, Since 2015, about 50% have been repeat investors Six digital medical companies successfully listed in 2019 After a three-year IPO window, six digital healthcare companies entered the public market in 2019 They are livongo, health catalyst, phreesia, change healthcare, peloton and progyny As of January 1, 2020, the total market value of six IPOs is $17 billion The 2019 IPO wave is validating the risk model of long tail investments in digital health (companies that invest less and generate a lot of returns) To temporarily exclude change healthcare (because it was previously acquired by McKesson), the founders and employees of five other companies have a total investment of $1.4 billion, transforming five "entrepreneurial ideas" into $13 billion worth of companies, and successfully IPO "7 times growth" is an effective way to examine whether these start-ups can really use the "total value multiplier" realized by the funds provided by their investors The digital health company index rose 31% in 2019, in line with the S & P 500 Athena healthcare was privatized by Veritas capital, a private equity firm, and medidata solutions was acquired by Dassault syst è MES, a European software company If Google's acquisition is completed as scheduled, Fitbit will not be on the list this year Investment in the digital health market will be more cautious In the last few months of 2019, a dozen conversations with other investors by rock health showed that the peak of the current investment cycle is coming to an end Although the market is expected to be more volatile and the "openness" of the IPO platform will be lower, investors still hope to continue to deploy funds to technology companies (although the pace may be slower than in recent years) to meet the huge challenges and opportunities of the U.S medical industry IPO may slow down in 2020 In the first half of 2019, the medical sector is still a hot area for IPO But on the whole, the collective listing of start-up companies has become a trend in 2019 In the second quarter alone, 62 companies from all walks of life went public in various markets, raising a total of $25 billion, which is also the highest trading volume quarter in the past four years However, several high-profile star companies, including Uber, LYFT and slack, which did not perform well in the first few months after listing, and the dramatic process of the listing of Wework, may weaken public investors' confidence in these startups Investors are concerned that some large start-ups, such as unicorns, are overvalued in the private market and have little room for growth once they enter the open market In addition, the company group of IPO in 2019 is one of the lowest profit groups since the Internet technology bubble The development trend and potential risks of these start-ups will also form resistance to the digital medical companies that want to impact the IPO in 2020 Despite the risks, the "bull market" of the decade continues As the 10-year bull market is likely to peak, some venture investors interviewed by rock Health say they are preparing for the economic and stock market downturn Although we will not try to make economic forecasts, uncertainties (including foreign policy escalation, trade wars, global economic slowdown and elections) have put external pressure on venture capitalists Over the past decade, the strong economy and low interest rates have been good news for venture capital companies to raise new funds, which has helped venture capital companies and private equity companies reach record levels of capital reserves Although these funds can provide a buffer for future market contraction (investors will still have funds to deploy to start-ups even if the macroeconomic environment suddenly deteriorates), entrepreneurs should be prepared for a tight venture capital market in the coming year Policies will continue to promote the development of digital health care US federal policy can maintain the direction of innovation by setting rules and standards and reducing regulatory uncertainty In 2019, CMS, onc and FDA continue to establish new rules of the game for the medical system: CMS sets reimbursement code for remote patient monitoring (RPM) FDA completed a retrospective test of the pre certification program Onc has completed the collection of public opinion on its proposed data rules These policies together form the basis of the federal government's digital medical technology policy, which laid the foundation for hitech act ten years ago The long-term commitment to healthcare digitalization has given the industry some flexibility in terms of short-term market volatility Startup health also released its 2019 annual investment and financing report in January Data shows that 2019 continues the strong upward trend of investment in health innovation funds in the past decade With 727 deals totaling more than $13.7 billion, 2019 is the second-largest year ever for health care funding, and the trend continues In other words, both rock health and startup health have observed a decline in investment and financing data in 2019 compared to 2018 Startup health calls 2019 "the year of the patient" because of a large number of institutions' investment in "bright health" and "capsule" and other tools designed to serve patients, but these are not only in 2019 For example, in the "moon landing plan", the funds are generally dominated by nursing services, especially outside the United States, including large-scale transactions for consumer centered medical service provider Babylon health, as well as Penguin almonds in China The amount of these two transactions alone reached US $800 million (in the statistics of startup health, there is no US $1 billion round a financing of JD Health) Significant progress has been made in the area of women's health this year In the fourth quarter of 2019, the program received more than $85 million, a total of $425 million for the year These include financing from the pill Club ($51 million), which allows women to order birth control measures online and deliver them to their doorstep, elvie ($42 million), femtech hardware and gennev ($4 million), and startup health has been working to help women manage their physiological cycles and how to deal with menopause On the other hand, this year's investment funds also show us other areas worthy of investment and innovation Areas related to drug addiction and children were underperforming, receiving only $96 million and $118 million, respectively In fact, none of the top investors in that year invested in drug addiction related innovative enterprises In addition, investment in education and content is the least, with only $120 million However, where there are gaps in any market, we see opportunities in these areas We are willing to continue to focus on these areas in a new way, so as to enter a new era of responding to the global innovation center and bold investors Each company in the startup health insights database is classified as one of the following 10 segments, its key value drivers Through the data of subdividing areas, we can have a deep understanding of the investment situation in each area, so as to understand the market and the proportion of investment in each area As mentioned above, we call 2019 "the year of the patient" due to the funding provided by many investment institutions for the "patient empowerment" tool, but there are other noteworthy trends For example, there is a massive influx of capital (totaling $3 billion) in support of clinical and management workflows, which will translate into significant investments in healthcare infrastructure Institutions' investment in insurance companies will also continue to expand the scope of universal health care, while education receives the least investment and needs continuous attention Health has raised $7 billion since 2010 The health innovation sector continues to maintain a strong upward trend, which is a curve we have been tracking for nearly a decade Although we can analyze the rising and falling trend of each curve in the previous quarterly reports, these figures tell a simple and remarkable story - the development of health innovation is continuous and rapid today In just a decade, 4300 start-ups have received funding, financing levels have increased tenfold, and the number of investors has grown similarly Most active investors Over the past decade, we have come a long way in terms of the depth and breadth of healthy innovation investors 2010