Funding For Digital Health Startups Sets Records

Electronic Healthcare

If you like the idea of working for a startup, young companies in healthcare are good places to be: During the first six months of 2014, funding for digital health startups eclipsed the total investment made for all of last year, according to seed fund Rock Health – and 2013 was a record-setter.

More than $2.2 billion has been invested in digital health startups so far this year, compared with about $1.97 billion during all of 2013. Deals grew larger as well, with the average round hitting more than $15 million. Last year, the average stood at about $10 million. (Rock Health tracks venture deals of at least $2 million.)

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Startups in California landed $891 million (nearly 40 percent of the total), followed by companies in New York with $349 million, Florida with $219 million and Massachusetts with $189 million.

“We’re seeing a lot of tailwinds from healthcare reform,” Rock Health Managing Director Malay Gandhi told VentureBeat. “Healthcare reform has put a lot of pressure on existing stakeholders to reduce costs, and startups in the top categories have a direct effect on those pain points.”

Those top categories are:

As you might guess, digital healthcare remains a good place for tech pros as companies large and small get in on the action. Google, Apple and Samsung, to name a few, have recently unveiled digital health products.

In Georgia, the Institute for Healthcare Information Technology recently reported strong IT hiring plans among healthcare organizations. In a survey, 86 percent of 300 healthcare providers and vendors said they anticipate more technology hiring taking place, while 79 percent said they have health IT jobs open now.

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