Financing prognosis good for digital health

Emerging industry alluring, even to cautious funders
Financing prognosis good for digital health
Emerging industry alluring, even to cautious funders<br />Venture-capital funding for digital health-care companies is expected to double in the United States over the next three years, with investors hoping their backing will help cure rising health-care costs while providing a nifty return on investment. New research by Accenture, a San Francisco ...

Venture-capital funding for digital health-care companies is expected to double in the United States over the next three years, with investors hoping their backing will help cure rising health-care costs while providing a nifty return on investment.

New research by Accenture, a San Francisco-based management-consulting, technology and outsourcing services company, projects that funding for this segment will grow from $3.5 billion in 2014 to $6.5 billion by the end of 2017.

Peter Adams, executive director of the Rockies Venture Club, said digital-health companies in Colorado are drawing attention.

Their software or hardware products use information and communication technologies to help address the health problems and challenges faced by patients with the hope of reducing health-care costs.

It could be a sensor to accurately measure how much medication is delivered by a drip bag such as the one being developed by Boulder-based Fluonic Inc., or web and smart-device solutions to reduce health-care costs through improved prescription use being developed by Boulder-based RxAssurance Corp. One of its programs, for example, reminds people when it is time to take medication, helps keep follow-up appointments and reach goals established by health-care providers.

Digital health-care products have been evolving for more than a decade, but it is considered a relatively new class that has few sales for investors to use for valuations, and where there are many companies vying for leadership with unproven yet promising innovation.

Digital health-care companies are divided into three major areas:

• Wearables, such as gadgets that can be worn outside or implanted into the body such as cardio and hydration monitors or glucose meters for diabetics.

• Transparency for consumers, such as websites that create databases that allow for comparison shopping for health-care insurance plans and procedures.

• Companies that provide technology to help doctors and other health-care providers serve patients better, from sharing electric health records to equipment such as Fluonic’s drip sensor.

“Digital-health care is the hottest growth area at all levels of investment in the United States,” Adams said.

Source: bizwest.com