2. About us
Rock Health is powering the future of the digital health ecosystem, bringing
together the brightest minds across disciplines to build better solutions. Rock
Health funds and supports startups building the next generation of technologies
transforming healthcare.
About this report
We wanted to know more about VC funding and entrepreneur perspectives
of the digital health space. This report sources data from Capital IQ, CrunchBase,
NVCA and a survey we conducted with 110 digital health entrepreneurs.
Caveat: we are not professional white-paperistas, just curious advocates who like to
share knowledge and further the discussion around the evolving digital health space.
4. VC funding of healthcare technology segment
0
1
2
3
4
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
% of # of VC deals % all VC funding ($)
Source: Capital IQ
5. 77% of VCs think healthcare IT
investment dollars will
increase in 2011
Source: 2011 Venture View Predictions Survey by NVCA and Dow Jones VentureSource
6. 35 digital health companies
have received $2M+ in 2011
Digital Health companies receiving $2M+ in ïŹnancing in 2011
Source: Capital IQ + CrunchBase
7. 20%
29%
51%
The majority of these companies
are building B2B businesses
Businesses/Health Orgs (B2B)
Consumers (B2C)
Medical Professionals (B2Dr)
Target User:
8. What are they building?
Consumer Web Sites
Personal Health Monitoring
Data Analytics
Data Sharing
Physician Social Networks
0 1 2 3 4 5
Themes of the 35 digital health companies receiving $2M+ in ïŹnancing in 2011
9. consumer web
Common theme #1
âHealth Guru is the web's leading destination site for health
information videos.â
âPersonalized, engaging health information, from leading medical
experts and similar community members, thatâs easy to understand
and all about you.â
âPlay games to train your brain.â
âYour child's health and development anytime, anywhere you want.â
âAn interactive platform that provides expert health information
and allows you to ask questions and get answers from trusted
healthcare experts.â
10. personal health monitoring
Common theme #2
âThe most accurate heart rate monitor for smartphones.â
âDaily health monitoring service to help reduce falls, monitor heart rate
and breathing rate, reduce the risk of bedsores and help manage chronic
diseases without attaching anything to the monitored person.â
BAM Labs
âTrack your caloric burn, activity levels, and sleep habits
to make every day your best day.â
âHealthrageous delivers on the promise of improved, sustainable health
by analyzing data collected from biometric measurement devices with
our expert system in order to provide you with the personalized support
and inspiration necessary for a lifelong journey of wellness.â
11. data analytics
Common theme #3
âExplorys enables the discovery of critical correlations,
trends, and outcomes across millions of patients, clinical
records, and diverse environmentsâ
âHumedica is a next-generation clinical informatics
company that provides novel business intelligence
solutions to the health care industry.â
âKyruus's data-driven products arm users with curated,
comprehensive, up-to-date information and intuitive analytics.
We help organizations assess and predict the risk, value, and
opportunities that characterize their ubiquitous interactions with
physicians across the entire healthcare value chain.â
12. data sharing
Common theme #4
âAxial solutions provide clinical data sharing to save time and
money across the healthcare delivery network -- for hospitals,
physicians, research organizations, and health plans.â
âResilient Network Systems' new class of Internet servers extends
the reach of the Internet to protected data and application content
by introducing new methods of establishing trust and giving
owners customized control over how their content is used.â
13. physician social networks
Common theme #5
âSermo is an online physician-only network for discussion
about clinical issues, health care reform, practice
management and more.â
âDoximity is a professional networking tool exclusively
for Physicians and health care professionals.â
14. Locations of 2011 VC-backed
digital health companies
California - 11
Massachusetts - 5
New York - 3
Companies receiving $2M+ in ïŹnancing in 2011
16. Largest Deals of 2011
software for healthcare and insurance delivery
$61M from Camden Partners and Kleiner Perkins CauïŹeld & Byers
software for cognitive enhancement
$32.5M from Menlo Ventures, FirstMark Capital, Harrison Metal Capital, Norwest
connecting providers and Medicare
$27M from Bain Capital Ventures and Lemhi Ventures
web-based EMR
$23M from Founders Fund, Artis Capital Management, Glynn Capital, Morgenthaler, Felicis
18. We surveyed 110 early stage
digital health entrepreneurs
âą 84% said they were
bootstrapping their venture
âą 13% have angel funding,
and only 2% had VC funding
âą 60% have had less than
$50K in funding
funding stage of respondents
< 6 months
6 months - 1 year
1 -2 years
2-3 years
3-4 years
5+ years
0% 10% 20% 30% 40%
age of company
19. What is your background?
Entrepreneur/Business
43%
Engineer/Developer
27%
Medical Professional
13%
Designer
5%
Scientist
5%
Other
6%
20. What motivated you to start your venture?
âI want to make the world a healthier place.â
âJust a consumer who saw a very broken system and wanted to ïŹx it.â
âFrom what Iâve seen, very few people in health tech are innovators.
Itâs boring out there.â
âWe saw ïŹrst-hand some of the care that patients were getting at top
medical facilities. The lack of focus on the patient was appalling, so
we decided to grab the bull by the horns.â
âLove.â
21. How challenging are these barriers for
entrepreneurs in the digital health space?
Funding
Establishing Sustainable Revenue Model
Talent Acquisition
Navigating Government Regulation
Access to Medical Expertise
Access to Technical Expertise
0% 2,000% 4,000% 6,000% 8,000% 10,000%
Almost 100% of respondents identiïŹed funding as a
somewhat or very challenging barrier.
20% 40% 60% 80% 100%
Somewhat Challenging Very Challenging
22. How will your venture make money?
Subscription Model
Charging Consumers Directly
Charging Medical Professionals
Product Purchase
Ad Model
Other
In-App Purchase
0% 9% 17% 26% 34% 43% 51% 60%
Respondents were able to select more than one checkbox, so percentages add to more than 100%.
23. Who pays for your product or service?
Consumers
Other
Hospitals
Insurers
Employers
Advertisers
0% 10% 20% 30% 40% 50% 60% 70%
The majority of digital health entrepreneurs surveyed think consumers will
pay for their product or service. Less than a third think insurers will pay.
24. Key Findings
From Capital IQ + CrunchBase:
VC interest in digital health is skyrocketing, and 2010 was a record year
for health technology as a percentage of all VC funding.
The number of healthcare technology deals more than doubled from
2005 (52) to 2010 (138).
35 digital health startups have received $2M+ in 2011 so far.
Rock Health survey ïŹndings:
The #1 challenge for digital health entrepreneurs is fundraising.
Early stage digital health entrepreneurs are building B2C companies...
despite the majority of VC dollars going to B2B ventures.
Entrepreneurs identiïŹed subscriptions as the most popular revenue model.
The majority of digital health entrepreneurs think consumers will pay
for their product or service. Less than a third think insurers will pay.
25. Want more?
List and details of the 35 digital health companies funded in 2011:
http://bit.ly/VentureFunded2011
List of 200+ digital health startups:
http://rockhealth.com/resources/digital-health-startup-list/
Entrepreneur? We still want to hear from you! Take our survey:
http://bit.ly/healthstartup