Owen Willis’ Post

In the US Who are the most impactful early-stage Digital Health Investors? Galen Growth | Insights You Can Trust's Blog "Most Impactful Digital Health Early-Stage Investors in the US Reduce Funding Stress for Their Portfolio Ventures" sheds insight. Of the 3,207 early-stage investors actively engaged in the US Digital Health landscape, 914 (28.5%) have consistently demonstrated a repetitive pattern of investment in this sector. These committed investors include leading venture capital firms and corporate venture arms, which have played a pivotal role in shaping the Digital Health ecosystem. The US leads the global Digital Health ecosystem, with $117.6 billion invested over the past five years. Investors like General Catalyst, Andreessen Horowitz, Gaingels, Lux Capital, and Alumni Ventures are among those most impactful early-stage investors in the US. These investors have played a crucial role in supporting Digital Health ventures and enabling healthcare innovation. https://lnkd.in/gQ6UH7HX #digitalhealth #digitalhealthinnovation #digitalhealthinvestment #digitalhealthecosystem #healthcare #healthcareinnovation

Funding trends in 2024 point to where investors are placing their biggest bets in health tech. Zooming out further, VC funding in the past decade paints a broader picture of how the market has evolved. Based on SignalFire's in-house Beacon AI data platform, Fierce Healthcare took a deep dive into health tech funding trends, both recent and over time. Check out our analysis here:

💲#VentureCapital is increasingly eyeing physical and in-person #BehavioralHealth businesses as investment opportunities. Why? These investments offer the potential for integrated care models, combining traditional in-person services with digital health solutions, and could help give health systems/payers what they want. Example: GV (Google Ventures) recently invested in hybrid outpatient provider Guidelight Health. 🏢 At the same time, many VCs remain hesitant to place their bets on capital-intensive business models with real estate components. “It’s just a matter of your investment thesis and what you’re willing to underwrite to,” Marissa Moore, CFA of OMERS Ventures told Morgan Gonzales for Behavioral Health Business. Story here 👉 https://lnkd.in/gj6Vpyt9

Taking a look at funding trends in 2024 gives a strong sense of where investors are placing their bets in health tech. According to Silicon Valley Bank, investment so far this year is hovering between $4 billion and $4.5 billion per quarter…

Healthcare is a human to human experience and benefits from relationships with physicians who know their patients . This has become very clear to me after 25 years in the pediatric emergency department, where in the last decade, the simple question of "who is your child's pediatrician" is answered with ➡ Name of Practice ⬅ . I would follow with "And who is your child's physician?" This was usually followed by a shrug of the shoulders. People want to be listened to, they want to be heard, and they want to be "cared" for. AI can't do that, and never will. Deeper dive here by Colin Daymude - https://lnkd.in/etVt9zp3

We released our H1 2024 funding analysis a couple of days ago, and there's plenty to sift through. Have a look! https://lnkd.in/gVB4hEiq There's a fair bit we didn't get to, however. Here's a few market data points that summarize the moment we're in: 1. It's 2018 again Deal volume and average deal size are the same as six years ago. Notably, Rock Health ended 2018 and 2019 with predictions of a market pullback... that seemingly never arrived. 2. Extension rounds are (still) in vogue In Q2 2024, fully 1/3 of all deals appear to be extension rounds - down from 55% of all deals in Q4 2023. To put this in perspective, for the whole of 2019 _just 4% of all deals_ met the criteria to be counted as "extensions" in our data set. (Yes. You read that right.) 3. Around 1/4 of extension rounds *appear* to be extensions of extensions Caveat: This is tricky to track precisely (because deal terms are not generally made public). Methodologically, "extension of extension" is inferred in cases where we tracked SEC data that shows a company raising two rounds in a row that have no designated round label (e.g., "Series Seed" or "Series F"). With that caveat out of the way, it's significant to note that "extensions of extensions" wasn't really a thing in 2023 (because extensions in 2023 mostly followed Seed or Series A rounds). By extension (ahem), I predict that capital market appetite for extensions will begin to run dry by the end of 2024 (which has implications for VC funding in 2025). 4. VCs aren't raising much money from LPs right now - and big generalist funds are raising the bulk of it. Per Pitchbook, just two funds (a16z and GC) raised almost half (44%) of all VC dollars so far in 2024 - twice the proportion "large funds" typically attract. Specialist funds (like Rock Health Capital) are perhaps that much more "special." 😅 And we're likewise incredibly fortunate to have closed our most recent fund in Q3 last year.

Health tech investments are picking up steam. Here are 5 VC leaders behind the biggest recent deals #healthtech #medtech #digitalhealth https://lnkd.in/efT4_erV

We will join a Virtual Fireside Chat this Thursday (06/06) hosted by Russ Korins to talk about how we think of investing in healthcare IT companies. Description is below: Funding Growth of Healthtech Companies: A Fireside Chat with Naile Kovuk and Chip Locke of Healthcare IT Investors Hughes & Company Date & Time: Jun 6, 2024 11:00 AM in Central Time (US and Canada) Description: We all know healthtech is a hot area and many founders and founding teams see this as an area ripe for rapid growth. But how should they think about funding this growth? To answer this question and share broader perspectives, we have Managing Partner Naile Berna Kovuk and Senior Associate Chip Locke of private equity investors Hughes & Company, which helps CEOs and their teams grow and scale healthcare software and technology-enabled service companies. In a conversation with CTSW technology attorney Russ Korins, Naile and Chip will explain what their type of private equity focused on growth means and how it compares to venture capital and commonly known types of private equity. They will discuss how they structure their relationship with portfolio founding teams and balance leveraging founders' knowledge and experience with adding best practices from across the portfolio. And they will discuss what drives and inspires them to invest in healthcare tech and what impact they hope to make. Here's a special opportunity to hear how investors think, and one that healthtech founders, executive teams in any area, and their advisors can learn from. Link to register: https://lnkd.in/gGBY437y

Just over 6 years ago, buried in Rock Health's 2017 year-end funding recap, we noted that public markets were shrinking, concluding with: "For now, at least, M&A is the new digital health IPO." https://lnkd.in/gHkdg9BU Six plus years later, the public market situation hasn't really changed. For a variety of regulatory and economic reasons, the stock market continues to shrink, and as a side effect of investor-friendly innovation (i.e., ETFs), it has become less efficient at allocating capital to new things. Meanwhile, however... PE appears to have stepped in to start filling the gap. 1. Getting Smaller Net equity issuance has been NEGATIVE in all but 10 of the last 109 quarters, with over $7T in public market net equity *retired* since the Fed started tracking data in 1996. (https://lnkd.in/gZUdr-Ya) There's been fewer IPOs and a lot more stock buy-backs + acquisitions. 2. Less Efficient (at allocating capital) Passively managed funds are great for public market investors but bad for capital market efficiency (because, well, they're "passive" allocators by definition). They'll soon represent about 25% of global AUM.(https://lnkd.in/g7uzPbSW) 3. PE Steps in Contrary to public market trends, however, "buy and hold" PE continues to grow. McKinsey recently reported that as of June 2023 PE AUM hit ~$13 trillion—roughly *double* the amount just 5 years earlier, in 2018, with a record $3.7 trillion in dry powder. (https://lnkd.in/g9z3XeqA) TL;DR: The sky is not falling, but the path to liquidity has evolved considerably in recent years. Some things remain the same, however: Having a plan and executing it well is, as a founder or as a venture investor, the best most sure path to creating valuable, profitable business. And working with folks who get what you do, are mission-aligned, and want to see you succeed makes the journey that much better.

At last, the digital health market seems to be settling into a steady investment pace. Investors are still waiting to see whether this can turn the sector’s tepid rate of exit activity around. The sector’s fundraising numbers for the first half of 2024 show that the investment environment seems to be normalizing for the first time since the Covid-19 pandemic. During the first half of this year, U.S. digital health startups raked in $5.7 billion across 266 deals, according to a recent report from Rock Health. The sector’s year-end venture capital fundraising totals for 2019 and 2023 were $8.2 billion and $10.7 billion, respectively. See what some of the investors, including David Kereiakes, has to say about digital health's funding environment. 🔗in comments. #digitalhealth #investment #venturecapital