StartUp Health Insights Report 2015

Published: April 1, 2015
Year End Early Preview

Report data through 12.15.15
StartUp Health Insights

Digital Health Funding Rankings
TM
2015: The Year Digital Health Hit Its Stride
A StartUp Health InsightsTM Report
Report inclusive of seed, venture, corporate venture and private equity funding
Sign up to receive weekly funding insights at startuphealth.com
2015 StartUp Health, LLC
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
2015 Year End Summary

While 2014 was the year that digital health broke out, 2015 was the year it hit its stride. A slow start in Q1 didnt hamper
a rebound in the market, with Q2 and Q3 ending on par with 2014. And although 2015 didnt surpass the $7B mark of 2014,
the total dollar funding is still double that of 2013.
Digital Health Funding Gets Smart: Although there are fewer mid-stage deals this year than last, companies that are raising
are able to do so faster than in 2014. Follow-on capital is readily available for those companies able to consistently
demonstrate a validated solution as investors are focused more on compelling business models and credible outcomes.
A Maturing Market: Deal distribution continues to shift to mid- and late-stage deals as average overall deal size is on par
with Series B rounds, as compared to it being in line with Series A rounds in 2013. Median deal size stayed consistent in
early-stage deals since 2014, while mid-stage and late-stage deals have increased 27% and 50%, respectively. Funding is
coming in bigger sizes and moving to later stages.
Investors Continue to Support Early Stage Innovation: As investors back later-stage companies, the most active investors in
digital health continue to support early-stage innovation. In fact, new entrants to the digital health space come in record
numbers, with nearly 600 organizations supporting innovation financially and with expert advice.
Shift in Focus to B2C / B2B2C Versus Strict B2B Models: After a strong 2014 with heavy investments in clinical B2B solutions,
2015 displayed a complementary investment landscape with funding focused more on the consumer ecosystem. Enterprise
solutions in workflow, population health and clinical decision support dropped in funding whereas patient/consumer
experience, wellness and e-commerce rose in the ranks. While the 10 top markets have consistently remained at the top,
they have shuffled significantly as different solutions receive financial attention.
Betting on Winners Across Singular Sectors: Time-to-market, funding and challenging pilot hurdles play a role in the
difficulties demonstrating an ROI and selling to budget-minded hospitals and clinics, effectively slowing the growth of many
B2B solutions. As market leaders emerge in each sector, investors are focused on identifying singular winners and
strategically funding them to dominate whole sectors. 2014 saw more of these all- in investments, explaining $750M of the
difference between this year and last.
Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only. 2015 StartUp Health LLC
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Digital Health Funding Snapshot Year Over Year

2015 saw a significant shift towards validated innovation. Todays capital is supporting companies with proven leadership,
strategy, business models and demonstrated outcomes. Although total funding is down from last year, there
is more market impact per invested dollar than ever.
617
561
$8
Funding ($B)
477
465
$7.0B
$1.6B
280
$6
$5.8B
$1.1B
$4
150
$1.9B
$2
$1.8B
$3.0B
$2.4B
$1.9B
$1.1B
$1.7B
2010
2011
Q1
2012
Q2
2013
Q3
2014
Q4
$1.9B
$1.8B
$1.0B
2015 YTD
Deal Count
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Digital Health Funding Snapshot Month over Month

Despite fluctuations and a slow first quarter of 2015, the market trend is still positive, with a regression analysis on a
month-over-month basis demonstrating a continued upward momentum.
$320M Series B
$1,250,000,000
$1.25M
R = 0.5597
$400M Series C
$31M Series A
$1,000,000,000
$101M Series B
$500M Series C
$1.00M
$33M Series B
$750,000,000
$394M Venture
$150M Series C
$0.75M
$37.9M Venture
$500,000,000
$37.5M Venture
$0.50M
$250,000,000
$230M Series B
$0.25M
R2 = 0.5564
$0
2010
2011
2012
2013
2014
2015
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
The Top 10 Most Active Markets of 2015

The patient / consumer experience sector continues to be a huge market force with increasing entrants and cash flow
driven by the market focus on prevention and savings, as well as the relative ease of market entry.
Subsector
2014 Rank
Total Raised YTD
Deal Count Average Deal Size
Patient / Consumer
Experience
$1.30B
111
$12.9M
2
3
Wellness / Benefits
$1.22B
54
$28.4M
Workflow
$641M
79
$9.0M
Personalized Health /
Quantified Self
$583M
32
$20.1M
Medical Device
$483M
64
$7.5M
E-Commerce
$464M
23
$25.8M
Big Data / Analytics
$409M
40
$10.5M
Population Health
$206M
18
$11.4M
Clinical Decision Support
$202M
19
$11.2M
Research
10
$97M
15
$6.9M
5
6
7
8
9
10
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
The Top 10 Largest Deals of 2015

The top 10 deals of 2015 include the largest ever Series A (Oscar) and venture deal (Zenefits). These record-breaking deals in
benefits, insurance, genomics and navigating the healthcare system represent answers to the biggest global healthcare
challenges today new insurance models, individualized medicine and price transparency.
Company
$ Invested
Subsector
$500M
Benefits
$394M
Navigating the Healthcare System
$145M
Insurance
$130M
$114M
Genomics
$108M
Genomics
$100M
Personalized Health
$90M
$81M
Insurance
10
$79M
Genomics
Notable Investor
Undisclosed
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Average Overall Deal vs. Average Round Comparison

The average deal size in digital health continues to increase. In 2013, the average deal size was $5.8M. This year, average
deal size increased almost three-fold to $15.1M, on par with the Series B average of $17.1M.
$40M
$40,000,000
Funding ($M)
Funding ($M)
2015
2013
$30,000,000
$30M
$20,000,000
$20M
$10,000,000
$10M
$0
Q1
Average Deal Size
Q2
Q3
Avg. Seed
Q4
Avg. Series A
Q1
Q2
Avg. Series B
Q3
Q4
Avg. Series C
*Excludes $500M Zenefits deal (Q2 2015) and accelerator rounds

DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Deal Size Ranges & Medians by Stage for 2015

As deal size continues to vary, the median ranges of early-, mid- and late-stage deals also continued to spread. Median
deal size stayed consistent in early-stage deals since 2014, while mid-stage and late-stage deals have increased 27% and
50%.
$27.9M
$5M
$193M
$17.5M
$81M
$3M
$3.1M
$200K
$35M
$0
$200M
Early-stage (Seed + Series A)
Mid-stage (Series B + Series C)
Late-stage (Series D+)
Excludes outliers: $500M Zenefits deal, $145M Oscar deal and accelerator rounds.
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Round Size Frequency: A Shift of Focus

The funding amount in $100M+ deals accounts for a $750M difference between 2014 and 2015. While the frequency of
deals over $50M has stayed even, companies raising $10-$25M saw a 21% boost in deal count.
160
Frequency of Deal Size
128
96
2014 $100M+ Deals

Total = $2.2B
2015 100M+ Deals

Total = $1.5B
Notable Deals
Notable Deals
$172M Series G
$320M Series B
$500M Series C
$230M Series B
$400M Series C
$394M Venture
64
32
1M
5M
10M
25M
50M
100M
150M
2014
200M
250M
300M
350M
400M
450M
500M
2015
DEALS & FUNDING
INVESTORS
MARKET DIVE
MOMENTUM
OUTLOOK
Deal Activity by Stage for 2015

The market continues to mature. Mid-stage deal volume grows overall, accounting for 34% of deals in 2015, up from
28% in 2014.
Deal Count*
2010
122
2011
232
2012
305
2013
444
2014
378
30%
2015
0%
35%
25%
Seed
Series A
18%
50%
Series B
Series C
11%
75%
Series D
3%
255
100%
Series E
Series F + G
Deal count only includes Seed though Series G rounds

10
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Funding Velocity: The Top 3 Most Active Markets

Across all digital health, companies traditionally take 15.2 months to raise a Series A after an initial Seed round.
The top three sectors are each uniformly spread between 13 and 16 months.
0.002
Avg. # of Months from

Seed to Series A
Subsector
0.001
Patient / Consumer
Experience
14.6 Months
Wellness / Benefits
13.3 Months
Workflow
16.6 Months
Average
15.2 Months
0.001
10
20
30
40
50
# of Months from Seed to Series A

11
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
The Top 10 Most Active US Metro Areas of 2015

A new hotspot for health innovation emerged on the West Coast, with NantHealth, HomeHero and Soothe all choosing
to call Los Angeles home, while the traditional investment hubs of the Bay Area, New York City and Boston continued
to provide large amounts of funding.
Metro Area
Seattle
1 SF Bay Area
2 New York City
3 Los Angeles
4 Boston
7 Denver
(36 Deals)
$77M
SF Bay Area
(104 Deals)
$2.0B
$378M
Salt Lake City

(3 Deals)
$612M
$134M
New York City

Denver
(11 Deals)
5 Miami
6 Chicago
Boston
(5 Deals)
Los Angeles
(22 Deals)
$391M
$135M
$150M
(42 Deals)
Chicago
(6 Deals)
$126M
Washington, DC
(6 Deals)
8 Salt Lake City

9 Washington, DC
10 Seattle
Miami
(11 Deals)
$248M
12
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Notable International Deals of 2015

From portable genomics tests in the United Kingdom to government-sponsored physician networks in China and doctor
searches in India, digital health is becoming a keystone component of international healthcare systems.
$39M
Payment Solutions
$20M
Genomics
$20M
Navigating the
Healthcare System
$394M
Navigating the
Healthcare System
$20M
Population Health
$32M
$28M
Medical Device
Patient/Consumer
Experience
$120M
Navigating the
Healthcare System
Huakang Mobile
China
$38M
Patient/Consumer
Experience
Genomics
$20M
13
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
The Top 10 Venture Investors of 2015

In 2015, a more diverse group of investors were involved in digital health than ever before, from institutional venture,
corporate venture and private equity to unexpected entrants like Disney. GE Ventures nearly doubled its deals from last
year and took the most active investor spot away from Qualcomm Ventures.
Firm
2015 Deals
2014 Deals
Stage
Early
1
2
2
2
10
10
5
5
5
5
9
9
12
FKA Fidelity Biosciences
Mid
Late
14
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Number of Investors Year Over Year

2015 showed a rising number of deals being struck by large groups of investors. This has been a consistent theme the last
few years as the total number of unique investors has grown significantly in the past two years. In 2015, the number of
investors making more than six investments in digital health doubled.
603
596
506
100
Investor Count
90
80
318
70
60
$1.6B
345
$1.1B
215
50
40
30
20
10
0
2010
2011
# of Deals by Investor
2012
2013
2014
6+
2015
# of Total Investors
15
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
Digital Health IPOs of 2015
Share Price ($)
From wearables and wellness to genomics, a record-breaking six digital health companies took the IPO path this year.
The diversity of their sectors are blazing the path for other consumer, clinical and wellness companies to exit in 2016
and beyond.
$60
Population
Health
Wearables
Wellness
Genomics
Telemedicine
Genomics
$101.3M
Pre-IPO VC Funding
$66M
Pre-IPO VC Funding
$108.9M
Pre-IPO VC Funding
$154.1M
Pre-IPO VC Funding
$93M
Pre-IPO VC Funding
$195.5M
Pre-IPO VC Funding
$762.3M
(Market Cap
12/15/15)
$6.15B
(Market Cap
12/15/15)
$597.6M
(Market Cap
12/15/15)
$520.8M
(Market Cap
12/15/15)
$707M
(Market Cap
12/15/15)
(28.22%)
(1.84%)
(6.04%)
(51.55%)
(38.29%)
$195M on opening
(6/8/15)
$732M on opening
(6/19/15)
$101M on opening
(6/22/15)
$180M on opening
(7/7/15)
$157M on opening
(7/1/15)
$239.8M
(Market Cap
12/15/15)
(57.09%)
$102M on opening
(2/13/15)
52-Week High & Low Share Price
$45
$30
$15
$0
16
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
StartUp Health Portfolio: Fundraising Survey and 2016 Predictions

To wrap up the year, we asked Healthcare Transformers from the StartUp Health Academy about their experience with
fundraising in 2015 and what they expect for 2016.
How long was your most

recent fundraising process?
22%
How many firms did you pitch

while raising your last round?
10%
11%
34%
<2 Months
2-6 Months
6 - 10 Months
>10 Months
16%
37%
N = 39
33%
1-5
5 - 10
10-20
20+
N = 39
37%
17
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
StartUp Health Portfolio: Fundraising Survey and 2016 Predictions

Our Academy CEOs believe that the fundraising landscape will remain steady in 2016 and expect to see more acquisitions
as market leaders continue to consolidate solutions.
In the next year, do you think it will

be easier or harder to raise money?
How do you believe the acquisition

market will change in the next year?
7%2%
2%
22%
37%
Much Easier
Easier
Same
Harder
N = 41
24%
Significantly More
More
Same Amount
Less
66%
N = 41
39%
18
DEALS & FUNDING
INVESTORS
MOMENTUM
OUTLOOK
StartUp Health Portfolio: Healthcare Transformer 2016 Predictions

FDA supervision will become more stringent
across the board. The Theranos scandal will have
consequences on the credibility of startups with
disruptive technology in the diagnostics space,
making investors more skeptical and worrisome
of regulatory risks.
@AccelDX
Finding a balance between data sharing and
interoperability that protects consumer security
will be critical to prevent health care rationing.
@CeroraInc
New markets will develop by exchanging and

securing consumer health data using
decentralized networks and P2P networks such as
Blockchain-based distributed databases that
provide better interoperability and limit
traditional security liability.
@InboxHealth
Synthetic biotechnology industry will boom - as
did 3D printing. Desktop biotechnology is the next
biggest market disruption, including desktop
diagnostics - the only customizable solution for
precision medicine adoption.
@Skindroid_Inc
We will see the patient driving the market for

consumer quality health services. The level of
personalization found in the marketplace, for
things like booking travel and online shopping,
will start to be demanded for healthcare too.
@CuratioMe
We'll start to see the first wave of consolidation

in telehealth / telemedicine, which will peak in
2018. We'll also see government proposing that
medical insurance marketplaces be allowed to
cross state lines as a way to prop up the ACA.
@UnaliWear
19
Our Methodologies
Sectors:
We have a broad view of digital health and believe that the current trend is a cross-pollination of technology and data with all aspects of health and
healthcare. StartUp Health InsightsTM tracks companies that enable health, wellness and the delivery of care through data / analytics, sensors,
mobile, internet-of-things, 3D printing and genomics and personalized medicine.
StartUp Health tracks companies based on their sectors, subsectors and specialties. Investments in subsectors and specialties are not mutually
exclusive, as deals are tagged with multiple subsectors and specialties based on the companys focus.
Q2 of 2015 brought with it an extensive database quality assessment. A new system was implemented allowing StartUp Health to track innovation
with enhanced granularity. Additionally, gaps in funding data were researched and added into our database enabling us to identify fundings
previously unaccounted for in previous reports.
Stage of Funding:
StartUp Health InsightsTM records only publicly available data on cash for equity investments as the cash is actually received by the company.
StartUp Health InsightsTM is inclusive of seed, venture, corporate venture and private equity funding.
Early stage: The company has raised a Seed or Series A round
Mid stage: The company has raised a Series B or Series C round
Late stage: The company has raised a Series D or other growth equity round
StartUp Health also tracks incubator rounds and other financings into privately-held entities (e.g. unnamed venture rounds, strategic investments,
growth equity and private equity).
In tabulating deal activity by stage we excluded rounds not clearly associated with a specific stage.
Sources:
Funding data is from StartUp Health InsightsTM, the most comprehensive funding database for digital health, and managed by the StartUp Health
team. Information, data and figures represent only publicly available data.
Data for acquisitions slide was provided by a range of sources including StartUp Health InsightsTM, CrunchBase, AngelList and news reports.
StartUp Health works to ensure that the information contained in the StartUp Health InsightsTM Report has been obtained from reliable sources.
However, StartUp Health cannot warrant the ultimate validity of the data obtained in this manner. All data is subject to verification with the venture
capital firms and/or the investee companies. Results are updated periodically. Therefore, all data is subject to change at any time.
If you find an error please let us know so we can correct it.
This report is provided for informational purposes and was prepared in good faith on the basis of public information available at the time of publication without independent
verification. StartUp Health does not guarantee or warrant the reliability or completeness of the data nor its usefulness in achieving any particular purposes. StartUp Health shall
not be liable for any loss, damage, cost or expense incurred by reason of any persons use or reliance on this report. This report is a proprietary aggregation of publicly available
data and shall not be forwarded or reproduced without the written consent of StartUp Health.
20
About StartUp Health

StartUp Health is a global health innovation company. The StartUp Health Platform, including its Academy, Network and
Innovation Fund, is empowering a global network of entrepreneurs and innovators to transform healthcare. StartUp
Health has the worlds largest portfolio of digital health companies, at more than 115, from 11 countries and 50 cities.
StartUp Health was founded in 2011 by Steven Krein and Unity Stoakes and is chaired by former Time Warner CEO, Jerry
Levin. StartUp Healths notable strategic partners and investors include AARP, AON, Aurora Health Care, California
Healthcare Foundation, Steve Case, Cleveland Clinic, Conifer Health Solutions, Mark Cuban, Esther Dyson, Roger
Ehrenberg, Brad Feld, GE Ventures, Kaiser Permanente Ventures, Robert Wood Johnson Foundation, SeventySix Capital
and Stericycle.
Learn more at startuphealth.com and follow @startuphealth. For press inquiries, email press@startuphealth.com
StartUp Health InsightsTM Report Contributors : Troy Bannister, Korey Fisher, Polina Hanin, Jennifer Hankin,
Samar Ladhib, Monika Wysocki
21
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Published: April 1, 2015

Year End Early Preview

StartUp Health Insights

2015: The Year Digital Health Hit Its Stride

A StartUp Health InsightsTM Report

DEALS & FUNDING

2015 Year End Summary

DEALS & FUNDING

Digital Health Funding Snapshot Year Over Year

DEALS & FUNDING

Digital Health Funding Snapshot Month over Month

DEALS & FUNDING

The Top 10 Most Active Markets of 2015

Total Raised YTD

Deal Count Average Deal Size

Big Data / Analytics

Clinical Decision Support

DEALS & FUNDING

The Top 10 Largest Deals of 2015

Navigating the Healthcare System

Navigating the Healthcare System

Navigating the Healthcare System

DEALS & FUNDING

Average Overall Deal vs. Average Round Comparison

Average Deal Size

*Excludes $500M Zenefits deal (Q2 2015) and accelerator rounds

DEALS & FUNDING

Deal Size Ranges & Medians by Stage for 2015

Early-stage (Seed + Series A)

Mid-stage (Series B + Series C)

Late-stage (Series D+)

DEALS & FUNDING

Round Size Frequency: A Shift of Focus

Frequency of Deal Size

2014 $100M+ Deals

2015 100M+ Deals

DEALS & FUNDING

Deal Activity by Stage for 2015

Deal count only includes Seed though Series G rounds

DEALS & FUNDING

Funding Velocity: The Top 3 Most Active Markets

Avg. # of Months from

# of Months from Seed to Series A

DEALS & FUNDING

The Top 10 Most Active US Metro Areas of 2015

Salt Lake City

New York City

8 Salt Lake City

DEALS & FUNDING

Notable International Deals of 2015

DEALS & FUNDING

The Top 10 Venture Investors of 2015

FKA Fidelity Biosciences

DEALS & FUNDING

Number of Investors Year Over Year

DEALS & FUNDING

Digital Health IPOs of 2015

Share Price ($)

52-Week High & Low Share Price

DEALS & FUNDING

StartUp Health Portfolio: Fundraising Survey and 2016 Predictions

How long was your most

How many firms did you pitch

DEALS & FUNDING