At the Threshold of a New Digital Health Landscape

5/15/14

After decades of development, digital health has arrived at a gateway that is reminiscent of the days when the brick-sized cell phone was ready to advance to the first flip phone, with a world of innovation beyond.

Industry leaders will be offering their thoughts on what that world could look like in presentations today and tomorrow during the ninth annual Wireless-Life Sciences Alliance Convergence Summit in downtown San Diego.

Breakthrough business models in digital health can be viewed in two ways. First, through the business lens of companies that provide investment returns by offering a health-related technology product or service. Another way of looking at digital health is through the lens of new healthcare companies that are using innovations in digital health to deliver improved health and wellness to consumers, and to help reverse the impact of disease and lower overall heathcare costs.

Funding for digital health startups has been on an upswing. Rock Health reported that digital health funding throughout the United States surpassed $1.9 billion in 2013, with 186 companies raising more than $2 million each. In its most-recent funding update, Rock Health reported that the first quarter of 2014 set an all-time record, with total funding of almost $700 million—an 87 percent year-over-year increase compared with the first quarter of 2013.

According to the 2013 Rock Health Digital Health Funding Report, the most-active VCs in the sector are Qualcomm Ventures, Social + Capital Partnership, Norwest Venture Partners, Cardinal Partners, Khosla Ventures, and Merck. Three of last year’s biggest deals, Practice Fusion, Proteus Digital Health, and Fitbit, each raised between $40 million and $70 million. For the sector to deliver typical venture returns, this emerging industry would need to create close to $15 billion worth of value by 2019.

The overarching imperative for innovation in this sector is here to … Next Page »

Wainwright Fishburn, Jr. is a founding partner of the Cooley law firm’s San Diego office, a prominent venture capital attorney, and chair of the firm’s digital health group. He is a frequent speaker on life sciences and digital health issues, including most recently a keynote talk at the CES 2014 Digital Health Summit. Follow @

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