Report: Midyear digital health market funding breaks records; Boston among most active metro area in U.S. for digital health investment

BOSTON – The digital health market broke “historic records” for midyear funding with investment hitting $3.9 billion, according to StartUp Health, a health startup accelerator.
StartUp Health said investment through the first six months of the year beat the previous record of $3.5 billion set in 2014. Patient and consumer experience remained the dominant market during the first half of the year with 51 deals and $958 million invested. Wellness was second with 25 deals and $854 million, while personalized health was third with 19 deals and $524 million invested.
Early-stage deals also dominate investment, accounting for 65 percent of deal volume, “speaking to investors’ continued interest in new innovations and business models,” a level unchanged from last year, according to the report.
The accelerator listed the top 10 most active U.S. metro areas for digital health funding, putting the San Francisco Bay area No. 1 with 50 deals at $967 million, followed by New York City with 26 deals and $753 million in funding, San Diego with six deals and $286 million in funding, and Boston with 10 deals and $131 million in funding.
While Providence was not included in the report, StartUp Health spokeswoman Liz Austin noted that ShapeUp, which she called the most notable digital health startup in Rhode Island, was acquired earlier this year by Virgin Pulse. She said ShapeUp, now known as Virgin Pulse, raised nearly $12 million since 2010. It is a provider of corporate well-being solutions.
IlluminOss Medical Inc., a later-stage medical device company, raised $5 million in the first quarter and in excess of $50 million to date, Richard G. Horan, managing director of the Slater Technology Fund, has said.