Consumer Health Investment Strong in August

The August numbers are in and StartupHealth has recorded an increase in investment in consumer health companies for the month.   The monthly report shows 50 U.S.-based health tech startups raised $242 million in August, which marks just about a 1.5% increase over the same period last year when investors closed 40 deals worth $246.4 million.  Looking at sub-sectors within the health tech industry, consumer health companies made a strong showing, raising $33 million.

To understand the market opportunity for health IT companies, Technology Business Reseaarch reported that healthcare IT spending will top $34.5 billion in North America in 2014.

Looking at the chart above, companies that provide healthcare practice management solutions continue to receive strong investment capital.  These companies develop and manage electronic medical records, payment processing, scheduling — all the tools that help a medical practice run smoothly.

As we’ve noted before, a month’s worth of data doesn’t provide enough information to signal the long-term outlook of the venture capital investors in the healthIT industry.  However, the second chart, showing that companies are receiving follow on rounds of funding, indicates the companies being built have met milestones and are gaining traction in the marketplace.