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StartUp Health Insights Funding Report Q3 2017 YTD

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Digital health funding broke all previous records in Q3, with 2017 YTD funding surpassing $9.0B. Assuming
momentum continues through Q4, we’ll finish 2017 well past $10B, a significant signal of support for
entrepreneurs working to achieve their Health Moonshots. Despite the headlines and uncertainty surrounding
healthcare reform, investment into digital health companies continues to accelerate.

Published in: Healthcare
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StartUp Health Insights Funding Report Q3 2017 YTD

  1. 1. © 2017 StartUp Health, LLC STARTUP HEALTH INSIGHTS Global Digital Health Funding Report 
 Data through September 30, 2017 Report is inclusive of all publicly available seed, venture, corporate venture and private equity funding Sign up to receive weekly funding insights at startuphealth.com Q3 2017 YTD TM
  2. 2. startuphealth.com/reports ABOUT STARTUP HEALTH Pages 2-3 ………………………………………….…………… About StartUp Health 4 ………………………………………….…………… Year to Date Summary 5-12 ………………………………………….…………… Deals and Funding 13-14 ………………………………………….…………… Geography 15-16 ………………………………………….…………… Investors 17-19 ………………………………………….…………… Health Transformers 20 ………………………………………….…………… Methodologies Jennifer Hankin Polina Hanin Mark Liber Anne Dordai Nicole Kinsey Tara Salamone StartUp Health InsightsTM Contributors Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC 2 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 (200 companies spanning 5 continents, 18 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 startuphealth.com.
  3. 3. startuphealth.com/reports 1 Access to Care Moonshot Delivering quality care to everyone, regardless of location or income 2 Cost to Zero Moonshot Radically reducing the cost of care by a factor of a million 3 Cure Disease Moonshot Curing disease using data, technologies and personalized medicine 4 Cancer Moonshot Ending cancer as we know it 5 Women’s Health Moonshot Prioritizing women’s health, including preventive care and new research 6 Children’s Health Moonshot Ensuring every child has access to quality care, particularly in underserved areas 7 Nutrition and Fitness Moonshot Providing access to a healthy environment and support an active lifestyle 8 Brain Health Moonshot Unlocking the mysteries of the brain to improve health, wellness and mental health 9 Happiness and Mental Health Moonshot Connecting mind, body and spirit in the pursuit of happiness 10 Longevity Moonshot Adding 50 healthy years to every human life ON A MISSION TO ACHIEVE 10 HEALTH MOONSHOTS One of the most exciting trends to emerge over the past few years 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 these 10 Health Moonshots to improve the health and wellbeing of everyone in the world. 3Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  4. 4. startuphealth.com/reports 4 Investors Bet on Personalized Future Half of this years top deals are in personalized health and patient/consumer experience, a clear signal that investors are focused on a consumer-centric, personalized future for health and wellness. 5 RiseoftheRest:SouthFloridaHeatsUp With over $231M raised YTD, the Miami metro area is back on the digital health funding map, another example of the rise of emerging innovation hubs across the country. DEALS & FUNDING GEOGRAPHY INVESTORS Digital health funding broke all previous records in Q3, with 2017 YTD funding surpassing $9.0B. Assuming momentum continues through Q4, we’ll finish 2017 well past $10B, a significant signal of support for entrepreneurs working to achieve their Health Moonshots. Despite the headlines and uncertainty surrounding healthcare reform, investment into digital health companies continues to accelerate. 4 Q3 2017 YTD SUMMARY: MOMENTUM TO PASS $10 BILLION 1 AnotherRecord-BreakingYear With $9B invested YTD, digital health funding is $2.6B ahead of where it was at the end of Q3 2016, and has already surpassed any total annual funding amount on record. 2 Later-StageDealsIncrease We’ve seen an increase in late-stage deals this year, with 75% of sectors receiving funding in a series D round or later, compared to only 50% at the end of 2016, showing a steadily maturing market. 3 DealSizesChargeUpwards Average deal size increased from $14M in 2016 to over $18M this year, signaling that investors are willing to put more money into companies with clear potential. Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  5. 5. startuphealth.com/reports DIGITAL HEALTH FUNDING SNAPSHOT: YEAR OVER YEAR 5 As we head into the final quarter of 2017, a new benchmark has been set in digital health, with funding having already surpassed 2016’s year-end total. Q3 2017 is the largest third quarter on record, exceeding last year’s Q3 by approximately $300M and catapulting this year’s totals to over $9B in funding. DEALS & FUNDING GEOGRAPHY INVESTORS 158 288 501 661 602 538 632 530 Deal Count 2010 2011 2012 2013 2014 2015 2016 2017 YTD Q1 Q2 Q3 Q4 $1.7B $2.2B $2.0B $833M $592M $669M $258M $8.1B $6.1B $7.3B $2.9B $2.3B $2.0B $1.2B $9.0B (YTD) $2.5B Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  6. 6. startuphealth.com/reports $.0B $.5B $1.0B $1.5B $2.0B $2.5B 2010 2011 2012 2013 2014 2015 2016 2017 
 $150M Series C $37.5M Venture $37.9M Venture $394M Venture $33M Series B $31M Series A $400M Series C $500M Series C R2 = 0.5564 $220M Series A Good Doctor $500M Venture DIGITAL HEALTH FUNDING SNAPSHOT: MONTHLY COMPARISON 6 $500M Series A $130M Series B $914M Series B While we tend to see funding totals dip during the summer months, an uptick in investment occurred in August. This September was the strongest on record, largely due to the $280M series D round raised by Auris Surgical Robotics, which is working towards the Cure Disease Moonshot. $600M Venture$360M Series E $280M Series D DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC YTD
  7. 7. startuphealth.com/reports $.0B $.5B $1.0B $1.5B $2.0B $2.5B Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015 2016 2017 YTD 7 August and September were both decisive contributors to this year’s record level of funding. Almost $215M more was invested in each of these months than in any other August or September to date. Funding including GRAIL’s $900M Funding Round and Health Outcome’s $600M Funding Round DEALS & FUNDING GEOGRAPHY INVESTORS DIGITAL HEALTH FUNDING SNAPSHOT: MONTHLY COMPARISON Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  8. 8. startuphealth.com/reports Company Total Raised Subsector 1 $914M Big Data/Analytics 2 $600M Education/Training 3 $360M Personalized Health 4 $325M Wellness 5 $280M Medical Device 6 $250M Personalized Health 7 $231M EMR 8 $200M Patient/Consumer Experience 9 $165M Personalized Health 10 $161M Personalized Health THE TOP 10 LARGEST DEALS OF 2017 YTD A wide range of startups around the world are landing larger and larger deals, with companies like Auris, 23andMe and WuXiNextCODE closing mega rounds in Q3 2017. 8 DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  9. 9. startuphealth.com/reports THE TOP 10 MOST ACTIVE SECTORS OF 2017 YTD 9 Subsector Total Raised YTD Deal Count Avg. Deal Size 1 Big Data/Analytics $1.3B 44 $30.9M 2 Personalized Health $1.2B 41 $28.2M 3 Medical Device $1.0B 61 $17.0M 4 Patient/Consumer Experience $953M 121 $7.9M 5 Research $791M 28 $28.3M 6 Workflow $671M 89 $7.5M 7 Education/Training $632M 12 $52.7M 8 Wellness $631M 54 $11.7M 9 Population Health $570M 44 $13.0M 10 EHR $381M 9 $42.3M Having received $585M+ in investments in Q3 alone, the digital med-device sector has rocketed up the list to $1B in total funding year to date. It is also among the most active sectors by deal count. While big data/analytics still tops the charts for total raised, the sector only recorded 13 deals, for a total of $138M in Q3 2017. DEALS & FUNDING GEOGRAPHY INVESTORS “The future is bright, when it comes to how we’re going to receive care and how we’re going to care for ourselves.” - Sathya Elumalai, Co-founder & CEO of Multisensor Diagnostics, a StartUp Health company Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  10. 10. startuphealth.com/reports 2010 2011 2012 2013 2014 2015 2016 2017 0% 25% 50% 75% 100% Seed Series A Series B Series C Series D Series E Series F + G + H 28% 35% 10%21% 5% *Deal count only includes Seed though Series H rounds and does not include venture rounds, accelerator funding or growth equity. Deal Count* 123 227 307 445 396 311 362 Though 2017 has seen a slight decline in seed deals, there has been a surge in series C & D deals, which accounts for the increase in deal size and total funding this year. Notably, Q3 2017 had the largest count of mid stage (32) and late stage (5) deals than any other Q3 on record. DEAL ACTIVITY BY STAGE 322 YTD 10 DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  11. 11. startuphealth.com/reports Funding($M) $0M $13M $25M $38M $50M 2014 2015 2016 2017 YTD Avg. Deal Size Avg. Seed Avg. Series A Avg. Series B Avg. Series C Avg. Series D AVERAGE ROUND SIZE: A YEARLY COMPARISON “Digital health today reminds me of ’94 internet. It’s early - the pipes are still being connected, the business models are in flux and armies of future Jeff Bezoses are in their garages leading us into an exciting new future. While there’s already been years of hard work and billions invested, it’s the essential foundation for extraordinary leaps forward." - Unity Stoakes Co-Founder and President, StartUp Health 11 Average round size continues to grow, a trend driven by the increase in both the amount and size of later-stage deals. Series D funding rounds are steadily getting bigger, a sign that more companies are maturing. On average, series D rounds were $113M in Q3 2017. DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC *Overall average deal size is inclusive of all tracked round types.
  12. 12. startuphealth.com/reports Digital health market maturation is a continuing trend, with nearly all sector segments seeing series A investment activity in Q3 2017. A few sectors are also seeing notable deal volume at the series B level, including patient/consumer experience, medical devices and population health. 47% Patient/Consumer Experience Wellness Personalized Health/Quantified-Self Big Data/Analytics Medical Devices Clinical Decision Support E-Commerce 21 26 10 3 3 0 17 19 5 4 0 0 12 7 11 6 4 1 11 14 6 2 1 0 6 12 9 1 1 0 5 12 9 4 1 0 4 7 4 3 3 2 5 4 4 5 1 0 2 4 2 0 1 0 0 3 4 1 1 0 4 1 1 0 0 0 2 1 1 0 0 0 Workflow Research Population Health EHR Education/Training Seed Series A Series B Series D Series E-H SECTOR MATURITY MAP 2017 More funding activity Less funding activity 12 Series C DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  13. 13. startuphealth.com/reports $119M $778M $539M $138M $3.4B San Francisco Bay Seattle San Diego New York City Boston $231M Miami $197M Minneapolis/ St. Paul $223M Denver (8 Deals) (12 Deals) (101 Deals) (9 Deals) (5 Deals) (2 Deals) (37 Deals) (23 Deals) Los Angeles $267M (11 Deals) Chicago $737M (14 Deals) Though Q3 deals have propelled metro areas like Chicago and Miami up the list, deal volume continues to be strongest in the Bay Area and the Northeast regions. Emergent hubs Seattle, Denver and Minneapolis/St. Paul continue to see deal volume, though of these, only Seattle recorded multiple deals this quarter. THE MOST ACTIVE US METRO AREAS OF 2017 13 DEALS & FUNDING GEOGRAPHY INVESTORS * Map shows Top 10 Metro Areas by Total Dollars Region Midyear
 Deal Count YTD 1 SF Bay Area 65 101 2 New York City 22 37 3 Boston 13 23 4 Chicago 5 14 5 Seattle 7 12 6 Los Angeles 8 11 7 Philadelphia 6 10 8 San Diego 7 9 9 Baltimore 3 8 9 Austin 7 8 9 Minneapolis 7 8 Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  14. 14. startuphealth.com/reports NOTABLE GLOBAL ACTIVITY IN 2017 $100M Venture $200M Venture $85M Venture $30M Venture $60M Series B $50M Venture $55M Series D $40M Venture Canada United Kingdom Switzerland Israel India China China Australia Global investment in digital health is robust, with several significant deals occurring in Europe, Asia and Australia this year. China boasts five of 2017’s top 12 international deals, including Ankon Technologies’ huge Q3 venture round. DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC 14
  15. 15. startuphealth.com/reports Firm 2017 YTD Deals* Stage Early Mid Late 1 8 2 7 2 7 2 7 2 7 3 6 3 6 3 6 3 6 3 6 3 6 THE TOP INVESTORS OF 2017 YTD New investors continue to pour money into digital health, notably F-Prime, which made five investments in Q3 2017. Although new firms continue to appear, many on the list are regulars, demonstrating confidence in the industry among investors. DEALS & FUNDING GEOGRAPHY INVESTORS 15Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC *2017 YTD deal counts excludes accelerator rounds
  16. 16. startuphealth.com/reports The biggest investors of 2017 have invested across a broad spectrum of digital health sectors. Of these, Khosla Ventures leads the group, having invested in seven sectors this year. Other investors appear to be taking a more focused approach. Y Combinator, for example, has invested in only three sectors -- all in Q3 of this year. Investors THE TOP INVESTORS OF 2017 BY SECTOR 16 Workflow Research E-Commerce Medical Device Population Health EHR Clinical Decision Support Personalized Health/ Quantified-self Big Data/ Analytics Patient/ Consumer Experience Wellness DEALS & FUNDING GEOGRAPHY INVESTORS Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  17. 17. startuphealth.com/reports STARTUP HEALTH COMPANY MERGERS & ACQUISITIONS September 2017 acquired by January 2017 acquired by October 2016 acquired by July 2016 acquired by May 2016 acquired by March 2016 acquired by June 2016 acquired by May 2015 acquired by March 2014 acquired by October 2013 acquired by July 2013 acquired by April 2017 merged with October 2016 merged with October 2016 acquired by 17Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  18. 18. startuphealth.com/reports STARTUP HEALTH’S GROWING ARMY 18Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  19. 19. startuphealth.com/reports 19 Read HEALTH TRANSFORMER, the digital magazine featuring the people and trends transforming health! Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC
  20. 20. startuphealth.com/reports 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, specialties technology type and end user. 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 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. • Q3 2017 also brought with it an extensive database and global industry review. A new database was implemented allowing StartUp Health to track funding records and investors from around the world more efficiently. Any inaccuracies were corrected with the transition of systems. Stage of Funding: • StartUp Health InsightsTM records only publicly available data on cash for equity investments when the cash is actually received by the company. StartUp Health InsightsTM 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 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. METHODOLOGIES 20Source: StartUp Health Insights | startuphealth.com/insights Note: Report based on public data through 9/30/17 on seed(incl. accelerator), venture, corporate venture and private equity funding only. © 2017 StartUp Health LLC

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