2016: THE HEALTH MOONSHOT MOVEMENT

Transcription

1 2016: THE HEALTH MOONSHOT MOVEMENT A StartUp Health Insights TM Report 2016 Digital Health Funding Rankings INCLUDING TOP MARKET FUNDING SPONSORED BY INCLUDING FUNDING SPONSORED BY Data from January 1, 2016 through December 15, 2016 Report is inclusive of seed, venture, corporate venture and private equity funding Sign up to receive weekly funding insights at startuphealth.com 2016 StartUp Health, LLC

2 ABOUT STARTUP HEALTH In 2011, StartUp Health introduced a new model for transforming health by organizing and supporting a global army of entrepreneurs called Health Transformers. With the world s largest digital health portfolio (more than 180 companies spanning 5 continents, 16 countries and 60+ cities), StartUp Health is mobilizing this rapidly growing army along with the world s batteries included leaders, innovators and investors, to achieve 10 Health Moonshots, with a 25 year mission to improve the health and wellbeing of everyone in the world. Learn more about how you can join this movement and support Health Transformers at Pages About StartUp Health. Year End Summary. Deals and Funding. Geography Investors StartUp Health InsightsTM Contributors Troy Bannister Mark Liber Anne Dordai Polina Hanin Jennifer Hankin Tara Salamone Nicole Kinsey Ali McDonough Niharika Gupta Rami Tal Topic 26. Outlook. Methodology Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 2

3 10 HEALTH MOONSHOTS THAT ARE CHANGING THE WORLD One of the most exciting trends to emerge is an ambitious generation of entrepreneurs, leaders and investors focusing on bold Health Moonshots. StartUp Health is organizing and supporting its global army of Health Transformers to focus on achieving 10 Health Moonshots with a 25-year mission to improve the health wellbeing of everyone in the world. 1 Access to Care Moonshots Delivering quality care to everyone, regardless of location or income 6 Children s Health Moonshots Ensuring every child has access to quality care, particularly in underserved areas 2 Cost to Zero Moonshots Radically reducing the cost of care by a factor of a million 7 Nutrition and Fitness Moonshots Providing access to a healthy environment and support an active lifestyle 3 Cure Disease Moonshots Curing disease using data, technologies and personalized medicine 8 Brain Health Moonshots Unlocking the mysteries of the brain to improve health 4 Cancer Moonshots Ending cancer as we know it 9 Mental Health and Wellbeing Moonshots De-stigmatizing mental health and connect mind, body and spirit 5 Women s Health Moonshots Prioritizing women s health, including preventive care and new research 10 Longevity Moonshots Adding 50 healthy years to every human life Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 3

4 2016 YEAR END SUMMARY 2016 was the beginning of the health sector s Moonshot Movement. Thousands of entrepreneurs, industry leaders and investors, coupled with a generation of new industry entrants started to rethink the future of health. From Vice President Joe Biden s Cancer Moonshot to speed up the progress in ending cancer as we know it, to The Chan Zuckerberg Initiative to cure all disease within 100 years, billions of dollars are being committed to health innovation - a mindset that exponential progress is possible Record-Breaking Digital Health Funding: Nearly $8 Billion was invested in over 500 digital health companies alone. This staggering figure has fueled innovation across the board in medicine, infrastructure and consumer-driven health. New Investors Pour In: More than 200 new investors entered the funding ecosystem in 2016, putting the total unique investors at almost 900. These investors come from a variety of institutions and geographies, beyond the traditional VC and angel investor, ranging from Fortune 500 to Private Equity. Investors Support Early Stage Innovation: Investors continue to support early-stage startups with hundreds of Seed and Series A Rounds this year. The urgency is now, it s about changing the culture, it s about coming up with a new strategy. -Vice President Joe Biden, at StartUp Health s Showcase at The Cleveland Clinic Medical Innovation Summit A Year of Mega Deals: Big deals dominated 2016 with almost 25% of all funding invested into five deals. It s no coincidence that companies receiving large amounts of capital like Onduo or Human Longevity Inc. are examples of companies with bold visions, setting out to achieve Moonshots. Delivering Care & Content Receives Most Funding: Almost 160 patient/consumer experience focused companies received funding in between 2-3x as many as other subsectors. Patient engagement and behavior change remain largely unsolved problems and while these early stage companies continue to experiment, we look forward to new models and strategies emerging that incorporate lessons learned. Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 4

5 DIGITAL HEALTH FUNDING SNAPSHOT: YEAR OVER YEAR Almost $8B have fueled new business models, increased demand, spurred a digital health revolution, and globalized what is now possible $7.1B $1.7B $5.9B $7.9B $1.6B Momentum across pharma, provider, payor landscapes have culminated in a record year of funding and ushered in a new wave of entrants. In today s climate of political change, and uncertain policy future, there is little doubt from investors that the health sector is in its moment of creative destruction. $1.3B $1.1B $274M $1.9B $494M $2.4B $590M $2.9B $611M We're in the midst of a revolution. Every 50 years you see a massive revolution in healthcare and the next one is due for Kimberly Muller, Director of Technology Transfer, UC Innovations StartUp Health NOW! Episode # Q1 Q2 Q3 Q4 Deal Count Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 5

6 DIGITAL HEALTH FUNDING SNAPSHOT: MONTH OVER MONTH Funding trends continue to oscillate but maintain a general positive incline over the long term. Although overall funding tends to slow down in certain months, some of the largest deals still occurred during those times (i.e. Human Longevity, Privia). We're just at the beginning of what's possible. -Dr. Douglas Wood, Medical Director, Center for Innovation, Mayo Clinic StartUp Health NOW! Episode #43 $1.2B $31M Series A $320M Series B $400M Venture $220M Series A $500M Venture $1B $33M Series B - z $500M Series C $0.8B $150M Series C $400M Series C $37.9M Venture $0.6B $0.4B $37.5M Venture $0.2B $0B $394M Venture $230M Series B Good Doctor $500M Series A R 2 = Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 6

7 DIGITAL HEALTH FUNDING SNAPSHOT: MONTH OVER MONTH In comparing monthly funding over the last four years, May and October are both breakout months for digital health funding, while June is the least active month on average. $1.2B $1B $0.8B $0.6B $0.4B $0.2B $0B Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 7

8 FUNDING VELOCITY: FIVE SECTORS Patient/consumer experience focused companies have had the shortest time between Seed Rounds and Series A Rounds at 13.3 months, while big data/analytics focused companies are at the longer side of the spectrum at 17.5 months. Across the entire digital health industry in 2016, companies took and average of 14.5 months to raise their A Round. Avg. time from Seed to A Round Patient / Consumer Experience 13.3 mo Medical Device 16.7 mo Big Data / Analytics 17.5 mo Clinical Decision Support 15.1 mo Raising money in healthcare is difficult. I think investors are still trying to figure this out. How to actually quantify what [startups are] saying. That's the biggest challenge. -Eran Kabakov, CEO, Docola StartUp Health NOW! Episode #100 Personalized Health / Quantified-Self 15.9 mo Number of Months from Seed to Series A Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 8

9 FUNDING VELOCITY: SEED TO SERIES A BY YEAR 2016 broke a trend in funding speed. Since 2013, we ve tracked the window of time between companies Seed and Series A Rounds. Over the years, the amount of time between rounds became less variable until this year, when it developed a funding profile more similar to The data below is presented as medians # of Months Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 9

10 THE TOP 10 LARGEST DEALS OF 2016 Three of the top five deals in record were signed this year, demonstrating international commitment to supporting paradigm shifting ideas in digital health. Company $ Invested Subsector Notable Investor 1 $500M Patient/Consumer Experience 1 $500M Patient/Consumer Experience Undisclosed 3 $448M Patient/Consumer Experience 4 $400M Wellness 5 $220M Personalized Health 6 $160M Wellness 7 $151M Patient/Consumer Experience 8 $145M Big Data/Analytics 9 $120M Patient/Consumer Experience 10 $100M Medical Device Undisclosed 10 $100M Medical Device 10 $100M Personalized Health Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 10

11 CROSS SECTION: $10M DEALS Taking a look at a group of $10M deals, we can see a variety of companies that have managed to attract mid-level investments over the course of the last year. Company Location Subsector Notable Investor Palo Alto, CA Dallas, TX Agoura Hills, CA Palo Alto, CA Stockholm, Sweden San Mateo, CA Sacramento, CA Toronto, ON Montreal, QC New York, NY Hong Kong Chicago, IL Boston, MA Chicago, IL New York, NY Patient/Consumer Experience Population Health Patient/Consumer Experience Research Wellness Big Data/Analytics Big Data/Analytics Wellness Personalized Health/Quantified-Self Big Data/Analytics Personalized Health/Quantified-Self Workflow Patient/Consumer Experience Workflow Wellness Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 11

12 CROSS SECTION: $1M DEALS An early-stage investment cross-section offers insight across an industry experimenting with maturing ideas. It s interesting to take note of the varied investors, from population health to workflow supporting these young businesses. Company Location Subsector Notable Investor Singapore Denver, CO Dallas, TX Tel Aviv, Israel Chicago, IL Population Health Patient/Consumer Experience Patient/Consumer Experience Big Data/Analytics Education/Training Flo Wilmington, DE Personalized Health/Quantified Self Los Angeles, CA Seattle, WA Helsinki, Finland Akron, OH Wellness Research Patient/Consumer Experience Medical Device New York, NY Medical Device Undisclosed Baltimore, MD Irvine, CA Nashville, TN Denver, CO Big Data/Analytics Workflow Patient/Consumer Experience Workflow Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 12

13 THE TOP 10 MOST ACTIVE MARKETS OF 2016 Patient/consumer experience was the most funded sector in digital health even the excluding the $1B funding raised by Onduo and Good Doctor s. Even after excluding these two deals, it is still the most funded sector in Digital Health. Subsector Total Raised YTD Deal Count Avg. Deal Size 1 Patient/Consumer Experience $2.8B 163 $17M 2 Wellness $1.0B 45 $23M 3 Personalized Health/ Quantified-Self $765M 47 $16M 4 Medical Device $713M 53 $13M 5 Workflow $593M 89 $7M Domestically, risk bearing organizations find a lot of value in the ability to reach out, connect and educate those outside the walls of a hospital or office. Because of a lower barrier to entry, in comparison to a personalized health/ quantified- Self company, there are more companies emerging and competing within the market. There is still plenty of opportunity in this area and there will be a need for focused solutions to help people with any ailment. 6 Big Data/Analytics $562M 54 $10M 7 Population Health $436M 52 $8M 8 Clinical Decision Support $332M 22 $15M 9 Research $280M 28 $10M 10 E-commerce $277M 17 $16M One of the most exciting things in 2017 will be the continued emergence of blockchain technology in healthcare to power a more secure and transparent healthcare system. This could have a huge impact on everything from how we share and view medical records, to our claim processing and billing systems. Blake Walker, Co-Founder and CPO, Inbox Health Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 13

14 DEAL ACTIVITY BY STAGE 2013 remains the year with the most early-stage investments at 74% or 331 deals. The last three years have remained strong with 2/3 of all deals being Seed or A Rounds. Steady Seed Round & Series A funding in 2016 was an encouraging sign that capital is still being distributed among early-stage digital health companies. Deal Count* % 33% 22% 7% 3% 0% 25% 50% 75% 100% Seed Series A Series B Series C Series D Series E Series F + G + H *Deal count only includes Seed though Series G rounds. Does not include venture rounds or growth equity. Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 14

15 MARKET MATURITY MAP 2016 We saw consistent market maturity in the patient/consumer experience, workflow, and personalized health markets, with the latter having the most late-stage deals. There were few clinical decision support, EMR, and e-commerce deals at the early stage. Patient/Consumer Experience Workflow Big Data/Analytics 47% Wellness Medical Devices Personalized Health/Quantified-Self Research Population Health Clinical Decision Support E-Commerce Education/Training EHR Seed Series A Series B Series C Series D-H More funding activity Less funding activity Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 15

16 MARKET MATURITY MAP DEALS SINCE 2010 Reflective of 2016, our historic data shows concentrations in funding at early stage patient/consumer experience, workflow and wellness focused companies. Seed Series A Series B Series C Series D-H Patient/Consumer Experience Workflow 47% Wellness Medical Devices Big Data/Analytics Personalized Health/Quantified-Self Clinical Decision Support Population Health E-Commerce Research EHR Education/Training More funding activity Less funding activity Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 16

17 AVERAGE ROUND SIZES: Average funding size has continued to march upwards, despite a 50% drop in Series C average. Series A rounds were 84% larger than in 2015 or $1M above 2015 s total average deals. $40M Funding ($M) $30M $20M $10M $0M Avg. Deal Size Avg. Seed Avg. Series A Avg. Series B Avg. Series C We're excited that apps for health and wellness will become less of a novelty and more of an actionable way to take control of your life. There are currently many apps which track things like miles ran, calories, and other parameters, but what s often missing is what this data means in terms of what the user should do. With advances in artificial intelligence, apps will be able to more effectively communicate whether it s time for a day off from the gym, if you should run an extra mile, or if you should start consuming more orange juice to get the necessary vitamin C. - Corey Mccarran, COO, Titanovo Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 17

18 ROUND SIZE FREQUENCY: FUNDING GIANTS We are seeing an increase in deal count numbers overall: an increase of 8% in $5M deals, 26% in $10M deals and 7% in $25M deals. Four of the six deals above $400M in the last three years have occurred in Frequency of Deal Size $394M $400M $448M $500M Good Doctor $500M $400M 0 $1M $5M $10M $25M $50M $100M $150M $200M $250M $300M $350M $400M $450M $500M Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 18

19 THE MOST ACTIVE US METRO AREAS OF 2016 Funding continues to be significant in the Bay Area and in the Northeast. In 2016, the metro regions of Boston and New York City yielded 208 deals (47% of all deals) and approximately $3.4B in funding (54% of all funding). Region 1 SF Bay Area 2 Boston Metro 3 New York Metro 4 San Diego San Francisco Bay Area (116 Deals) $1.5B Salt Lake City (7 Deals) $105M Minneapolis / St. Paul Metro (8 Deals) $216M Philadelphia Metro (15 Deals) $200M Boston Metro (33 Deals) $966M 5 Los Angeles 6 Minneapolis/St. Paul 7 Philadelphia Los Angeles Metro (29 Deals) $468M $180M Chicago Metro (17 Deals) $921M New York City Metro (59 Deals) 8 Chicago 9 Salt Lake City 10 Washington, DC $710M San Diego Metro (15 Deals) $97M Washington, DC Metro (9 Deals) Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 19

20 NOTABLE INTERNATIONAL DEALS OF 2016 Global investment in digital health is accelerating with several significant deals in 2016 from Europe to Asia to Australia. Patient/Consumer Experience $120M Wellness $45M Patient/Consumer Experience $31M* Patient/Consumer Experience $448M Research $45M Ping An Good Doctor Patient/Consumer Experience $500M Medical Device $100M Population Health $25M China * Total in 2 rounds of funding in 2016 Medical Device $35M Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 20

21 THE TOP OF 2016 We are seeing huge strides in new investors coming into the digital health scene. All of the top 10 investors of 2016 are either maintaining or increasing their involvement in the digital health Industry. Firm 2016 YTD Deals 2015 Deals Stage Early Mid Late Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 21

22 NUMBER OF YEAR OVER YEAR In 2016, we saw the total investor count jump by 42% - a huge signal of a booming industry. Not only are more investors entering the scene, but they are also participating in more rounds than ever brought investment from almost 900 unique firms, angels or investment arms - almost 300 more than last year. 865 Investor Count # of Deals by Investor Total Investors 1 Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 22

23 INSIGHTS FROM HEALTH TRANSFORMERS We surveyed Health Transformers from the StartUp Health Academy about their fundraising experiences in 2016 and their predictions for How long did Health Transformers most recent fundraising process last? How many firms did Health Transformers pitch to while raising their last round? 15% 15% 35% 35% <2 Months 2-6 Months 6-10 Months >10 Months 26% 16% 13% 19% 26% N = 37 N = firms 5-10 firms firms firms 30+ firms Digital health reflects the incredible technological progress of the 21st century. It is another industry revolution that we are lucky to witness and participate in. - -Leon Eisen, PhD, CEO, Oxitone Medical 1 Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 23

24 INSIGHTS FROM HEALTH TRANSFORMERS Imagine a world though, where you can be in NYC, Springfield or Mali and have access to an identical level of care - Hunter Howard, Founder, President The recent developments in technology in 2016 now allow medical entrepreneurs to enter the world of digital health with a much lower technological threshold. - Ansgar Bittermann, Founder, CEO The change in access to care is going to be powerful and lead to happier and healthier people everywhere. I can't wait - Coley Parry, Founder, CEO I am thrilled to see that the healthcare ecosystem is being more receptive to AI and I am excited to see how our ecosystem really maximizes it to cut patient cost down and deliver better patient outcomes to all. - Alex Guastella, Founder If we change ourselves, the realities of the world will change. I look forward to the day where all people, of all diversities, break the boundaries between healthcare provider and patient and celebrate the truth that we are all patients and we all have a responsibility in creating a better, sustainable world- especially in Health. I'm most excited about our world taking action towards the advancement of understanding, the destruction of ideologies and judgements, and the growth of consciousness. I know that health will play a central role in this growth of mankind. - Teddy Hodges, Founder, CEO In 2017, we are most excited to see online healthcare increasingly become not only a tool to get quick online help from a doctor for a specific problem, but also a channel to deepen and extend your offline relationship with your preferred provider - Eric Price, Founder, CEO The gap between idea and implementation is a difficult one to bridge, which makes 2017 a truly exciting time to be an innovator in aging-in-place technologies. 1 - Jean Anne Booth, Founder, CEO 2017 will be a year of big change and disruption. We will have to deal with some negative pressures but new opportunities can be born in such a highpressure environment, and I believe that innovations by private companies and startups will fill the void created when the government steps back - Maksim Tsvetovat, Founder, CTO I am excited that there is more interest in Mental Health than ever before and changes are coming in federal regulations to increase the attention in this area. - Beth Sanders, Founder, CEO 1 Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 24

25 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 Insights TM 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 company s 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 Insights TM records only publicly available data on cash for equity investments as the cash is actually received by the company. StartUp Health Insights TM is inclusive of accelerator, pre-seed, 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 privatelyheld 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 Insights TM, 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 Insights TM, CrunchBase, AngelList and news reports. StartUp Health works to ensure that the information contained in the StartUp Health Insights TM 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. 1 Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 25

26 STARTUP HEALTH S GROWING ARMY Source: StartUp Health Insights startuphealth.com/insights Note: Report based on public data on seed, venture, corporate venture and private equity funding only StartUp Health LLC 26