Digital health a goldmine for investors
Health & Biotech
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Digital health was the sector du jour for investors around the world in the six months to June 30, with venture capitalists alone sinking $US6.3b ($9.09bn) into the industry.
That’s a record figure up 24 per cent on the same period in 2019, according to information service Mercom Capital Group.
However, as the financial year came to a close investors bunkered down and the number of deals fell.
“Seen as a solution to many of the health challenges resulting from the COVID-19 pandemic, several digital health technologies and services have gone mainstream. Investors have noticed the potential, and telehealth has been the biggest beneficiary and has received almost $2 billion in the half year,” said Mercom chief Raj Prabhu.
“mHealth apps and data analytics companies have also benefited. Digital health companies had their best fundraising first half ever and have now raised $US50bn venture funding in over 5,000 deals since 2010.”
Of nine digital health technologies, telemedicine attracted $US1.7bn in the last six months, Mercom data showed.
In Australia, telehealth was freed from heavy restrictions in March to enable patients stuck at home to access medical advice.
Following heavy lobbying from the Australian Medical Association and Royal College of GPs, last week Minister for Health Greg Hunt restricted telehealth services to a person’s “regular” GP only, effectively shutting down telehealth-only services run by the likes of Chemist Warehouse.
But the broader telemedicine thematic is a favourite of analysts, with Morgans’ Scott Power saying the shift towards tele-imaging, for example, was happening before the COVID-19 pandemic.
The Mercom data covered deals in 21 countries, although companies in the US recorded the most number of deals.
Notable M&A deals included the acquisition of personalised cancer test developer ArcherDX by genetics company Invitae for $US1.4bn, Teladoc Health’s acquisition of rival telehealth operator InTouch Health for $US60m, and pricey yoga tights seller lululemon athletica’s acquisition of home fitness company MIRROR for $US500m.