According to analysts, third-quarter digital health finance has already usurped a record second quarter this year as the COVID-19 pandemic continues to spark investor interest in space.
Digital health companies raised about $ 5.8 billion in the second quarter, about 22% more than in the first quarter. But the funding has already reached about $ 6.7 billion since July and could manage $ 8 billion by the end of the third quarter on Wednesday, said Ja Lee, a health analyst at CB Insights, during the week of the consulting firm’s conference.
COVID-19 has dramatically increased consumer demand for digital products to access the home health system, such as telemedicine for virtual doctor visits. Experts agree that this could lead to long-term change in the healthcare landscape, with a significantly higher percentage of healthcare being delivered digitally in the future.
As a result, investor activity in former niche areas is partly on the rise. For example, according to CB Insights, mental health has seen a huge increase in offers this year. It is fast becoming one of the most active areas in digital therapy, with conditions like depression and anxiety being exacerbated by COVID-19. A study published in Science Advances on Wednesday found a marked increase in acute stress and depressive symptoms during the first months of the pandemic, which increased significantly with deaths in the United States.
As a result, mental and behavioral services are becoming more sophisticated and an increasing number of services are offered for different use cases to employers and health plans. Analysts report an increase in mental health platforms that focus on psychotherapy and focus on specific mental health services as well as mental health options targeting women.
According to CB Insights, the health care mega rounds or funding rounds of $ 100 million and more in the third quarter have already surpassed a quarter in the past eleven periods. One of those mega rounds was for Lyra, a California-based mental health services startup with over 1 million members that raised $ 110 million in August. The deal brought Lyra’s total funding to $ 292 million and raised its overall valuation to over $ 1 billion, according to the company.
Earlier this month, Ginger’s Virtual Behavioral Health Care System, which sells psychiatry, therapy, and educational services, raised $ 50 million in its largest funding round to date.
Interest in women’s health has also increased in recent years and the market is growing to offer a wider range of products and services such as fertility, Lee said. So far in the third quarter, the flow of funds in space has increased, including growing interest from state-owned corporations as women’s health gains acceptance and corporate interest.
As a result, employers have more opportunities to deliver fertility benefits, like Kindbody, a two-year, millennium-focused startup that had a $ 34 million round in July, and five years of carrot fertility that grossed $ 24 million in August.
Support for chronic care, telemedicine “Teladongo” after the heat
Experts also predict an increase in mergers and acquisitions in the chronic care market, particularly after the massive $ 18.5 billion acquisition of chronic care provider Livongo in August. Interest in the industry has exploded as the pandemic has made access to personal medical care difficult and has led people with chronic illnesses, many of which require consistent and timely monitoring, to turn to telemedicine, digital education, and remote monitoring of Turn to symptoms.
One such company, Vida Health, has tripled inquiries in the past three months, CEO Stephanie Tilenius told CB Insights.
COVID-19 accelerated the industry by about five years, mainly by introducing more people to the concept of virtual assistance. Before the pandemic, however, interest grew steadily, said Livongo founder Glen Tullman. Industry officials say chronic care management has untapped potential as current actors affect only a fraction of the 150 million or so people in the United States with chronic disea
And, in the face of the pandemic, virtual care is becoming more of a necessity than a luxury in order to minimize exposure to COVID-19 and ensure patient access to care, despite the volume falling to low levels in April.
As a result, telemedicine companies will continue to expand their technology and care management through grassroots growth and access as new arrivals grow, said Marissa Schlueter, a clinical health researcher at CB. Understanding. For example, the Heal home health network launched a telemedicine application in March, and the medical research firm Evidation raised $ 45 million to expand into virtual care in July.
Hence, investments to fund these efforts will increase. Telemedicine startups have accumulated 412 transactions per year valued at $ 6.15 billion and are projected to reach $ 8.86 billion (and 594 transactions) by the end of the calendar year.
By comparison, telemedicine companies raised $ 5.8 billion in 407 transactions in 2019, according to CB Insights.
Schlueter named Livongo competitor Omada Health, which recently acquired a virtual physical therapy company, as an “attractive but potentially expensive destination” for buyers. However, Sean Duffy, CEO of Omada, shook off speculation in a panel on Thursday.
Duffy said, “This registration plan already exists and will be for the foreseeable future to create the kind of business that can continue to be a stand-alone market.” All in all, “there will be a lot of contract work. We have seen it, we have seen it, we will continue to see it. “
When it comes to global health care funding worldwide, the third quarter could also be on track to break the second-quarter record, according to Lee.
Water companies around the world contributed a record $ 18 billion in the second quarter after falling in the first quarter. However, given the current execution rate, CB Insights predicts that it is expected to exceed $ 20 billion due to a large number and volume of transactions, especially in the Americas and Asia.