By Charlotte Hu, Business Insider | October 4, 2018
Health technology startups are seeing a lot of green, as investors are pouring in to get a piece of the industry’s hottest young companies.
Digital health startups this year have already raised $6.8 billion in funding, 20% more than the total raised in 2017, according to the seed fund Rock Health.
Investors are overwhelmingly in support of bringing healthcare services to the home, with companies offering on-demand healthcare services as their main draw receiving the most funding. This category includes in-home care, prescription delivery, and telehealth companies. The takeaway? Consumers still want in-person interactions with physicians and nurses and also want healthcare to be more accessible and convenient.
While around 63% of the overall funding coming from independent venture funds, corporate entities such as big pharmaceutical companies and health insurance companies are also becoming significant investors. One example of this is GSK’s $300 million investment in genetic data company 23andMe.
Tech companies are also staking a claim in the space as highlighted by Amazon’s continued push into healthcare.
Here are the digital health companies that have raised the most funding this year.
Peloton Interactive raised $550 million. It created an at-home bike that allows users to live-stream fitness classes. It also launched an at-home treadmill this year.
The company was rejected over 5,000 times by investors but is now worth $4 billion. According to Peloton CEO John Foley, Peloton wants to reinvent the way people work out altogether. Business Insider’s Mary Hanbury also tried out the fitness bike for herself, read about her experience here.
23andMe, which makes consumer genetic tests, raised $300 million.
23andMe was co-founded in 2006 by CEO Anne Wojcicki (the sister of YouTube boss Susan Wojcicki) and Linda Avey, who left the company in 2009. After some back and forth with the FDA, the company in April 2017 was officially authorized to market its direct-to-consumer tests for 10 different medical diseases and conditions, including Parkinson’s and Alzheimer’s.
American Well, which connects patients with doctors in real-time over video, raised $291 million.
American Well is one of the best funded companies in the digital health space. It competes with similar companies like Teladoc and Doctor on Demand for investor attention. It’s part of a wave of telemedicine that big companies like Apple have even dabbled in.
Butterfly Network raised $250 million. It created a razor-sized mobile ultrasound that’s both cheap and portable.
Charlotte Hu / Business Insider
Traditional ultrasound machines are clunky and their supply in hospitals can be limited. Butterfly founder Jonathan Rothberg wanted to democratize the access to these machines, which can cost up to $70,000 on average. He created Butterfly iQ, which can easily fit into the pockets of healthcare providers and only costs $2,000.
HeartFlow raised $240 million. It provides a non-invasive at-home cardiac test for patients.
Currently, examining a patient’s artery requires a catheter, which needs to be threaded from the groin to the heart. HeartFlow wants to get the same measurements, but with a non-invasive and lower-risk CT scan that can create a 3-D image of the heart.
Helix raised $200 million. It wants to make genomic data more portable, relevant and accessible for the patient.
Helix wants to democratize your genomic data, so you can access what you want, when you want to. Business Insider profiled the co-founders of the company in its recent 30 healthcare leaders under 40 to watch. Helix is also participating in a large-scale population health study called “Healthy Nevada.”
Outset Medical raised $132 million. It brings kidney dialysis treatments to the homes of patients
Outset Medical’s main product is Tablo, a dialysis-on-wheels that can sit at a patient’s home. Kidney dialysis machines take up the function of a normal kidney for patients who have experienced kidney failure. The lifesaving treatment filters the patient’s blood and keeps the body chemically balanced.
Tempus raised $110 million. It provides a library of clinical data to help patients personalize cancer care.
Technology company Tempus was started by Groupon founder Eric Lefkofsky. It has a $2 billion valuation. Tempus sorts through clinical data from doctors, hospitals, and studies and molecular data from drug experiments analyze for patterns and help patients curate a more personalized cancer treatment. The work it’s doing is similar to that being done by Flatiron Health.
Collective Health raised $110 million. It helps patients manage their health benefits.
Collective Health helps self-insured employers build out health plans that fit their needs. It handles the logistics and make submitting bills and handling claims easier for the employers. The startup could potentially be a good model for the JPMorgan-Amazon-Berkshire Hathaway healthcare initiative.
Livongo raised $105 million. It uses mobile technology to monitor diabetic patients at home.
Livongo wants to help patients manages chronic diseases like diabetes and hypertension at home. They work with employers as well as health plans. The company has rolled out a whole package of tools for home-monitoring for diabetic patients.