Venture-capital funding for the healthcare IT sector soared to $1.2 billion last year from $480 million in 2011, with the number of deals growing from 49 to 163, according to new research from Mercom Capital Group.
Calling 2012 a “spectacular year”, Mercom said the fourth quarter of 2012 saw the largest number of deals in a quarter since it began tracking the market in 2010.
That year, venture-capital funding totalled $211 million in 22 deals.
“While the focus of funding has been in the health information management category, which covers technologies on the healthcare practice side, there is significant investment and funding going into companies that engage the consumers – like mobile health, telehealth, personal health and social health,” said Raj Prabhu, a managing partner at Mercom.
The top venture-capital funding deal in 2012 involved Castlight Health (San Francisco, USA), a provider of healthcare web and mobile-based transparency solutions that enable comparisons of doctors, hospitals and medical procedures based on price and quality, which raised $100 million from a group of investors.
M&A activity in the sector was also reported to be “robust” in 2012, with 163 transactions totalling about $7 billion.
The biggest deal was the $1.4 billion acquisition of Sunquest Information Systems (Tucson, USA), a provider of diagnostic information technology and clinical and anatomic laboratory software solutions, by industrials conglomerate Roper Industries (Sarasota, USA).