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Healthcare IT Investments Grow in Q2 2011

Venture capital investments in healthcare-related IT software and services increased more than investments in other area of the healthcare sector in 2Q 2011, according to Dow Jones VentureSource.

Health IT investments grew 27% from $156MM in Q2 2010 to $198MM during the same period in 2011.

There were a total of 19 deals in Q2 2011 – a 58% increase vs. YA with California and Massachusetts continuing their dominance of healthcare venture investment representing 56% of all deals and 75% of venture funding.

Jessica Canning, Dow Jones VentureSource’s global research director, states that total venture investment for health IT is currently at $245MM to date in 2011. In 2010, the industry saw approximately $486MM in investments.

Q2 2011 also saw the percentage of seed VC deals climb 12% — a five quarter high. This trend was demonstrated in all sectors lead by internet, healthcare and clean tech sectors.

Across all healthcare investments in general, early stage investment continued to increase, bouncing back from a 5-quarter low in Q1’ 11.

Medical devices continue to lead investment within the Healthcare sector, followed by relatively strong quarters from Drug Development and Pharmaceuticals.  (Source:  CBInsights, Venture Capital Activity Report:  Q2 2011)

During the quarter, total Venture investment in the sector was 147 deals totaling $1,894M, with the top five deals being:

  • Cameron Health
  • Tesaro
  • Radius
  • Merrimack Pharmaceuticals
  • Ultragenyx Pharmaceutical