Venture Capital Investment in mHealth for 2012 Totaled $907.7 Million

MOUNTAIN VIEW, Calif.--()--Venture capital investment in the mHealth sector totaled $907.7 million for 2012 according to data compiled in a report released today by Mobile Health Market News. Investment during the fourth quarter of 2012 came to $200.7 million, down just six percent from Q3.

“Investors are exhibiting caution when it comes to putting money into products and services that directly impact patient care”

Subsector Breakdown

For Q4, the leading subsector by far was HCIT which accounted for 45% of mHealth investment dollars during the quarter. HCIT also led the other subsectors for the year capturing just under 46% of investment.

The second most popular subsector for venture capital investment in 2012, as well as in Q4, was monitoring taking in $191.2 million for the year (or 21% of total capital) and $62.4 million in the fourth quarter (or 31% of total capital).

“Investors are exhibiting caution when it comes to putting money into products and services that directly impact patient care,” notes Alpidia Barraza, Mobile Health Market News’ Research Director. “Of the 120 disclosed investments in 2012 fifty percent were $5 million or under, hence I suspect they are keeping their investments in these companies smaller while they test the waters and wait out the regulatory uncertainty.”

Quarter-on-Quarter Comparisons

With the exception of Q2, quarter-on-quarter investment was relatively stable in 2012 both in terms of the value of investment and the number of deals ranging from a low of 163.3 million in Q1 to a high of $213 million in Q3.

The second quarter was an extreme outlier accounting for 36% of investment for the year with $330 million going into 39 deals. Much of that discrepancy is due to the $100 million round that went to Castlight Health, but even taking that deal out of the equation, Q2 was still the winner.

“We expect that many people will be disappointed that investment in the mHealth space did not continue on the trajectory it started out on in the first half of the year,” says Cassie Arnold, Managing Editor of Mobile Health Market News. “However, we think a more stable investment environment is better for the industry in the long run.”

Mobile Health Market News is an online news and information channel covering the business of mobile health. We provide subscribers with easy-to-read, authoritative news summaries and independent research on the business trends impacting the rapidly evolving mHealth space.