Health IT is gaining ground. According to Dow Jones VentureSource, venture capitalists invested $659 million in 91 deals in 2011, up 25.5% from $525 million in 71 deals the prior year. In the first quarter of 2012, health IT companies raised $102 million, a 75% increase over the same period last year. In contrast, biopharma investments were down 46% during the same period.
On the Forbes Midas List of 100 VCs, Peter Thiel (#8) of Founders Fund is a newcomer to health IT. Best known as a PayPal founder and early Facebook investor, Thiel led last April a $23 million Series B round in electronic health record company Practice Fusion, and reinvested again in September. Founders Fund is also an investor in ZocDoc, a fast-growing booking site for doctor appointments. Joining Founders Fund in ZocDoc were SV Angel’s Ron Conway (#15) and Digital Sky Technologies’ Yuri Milner (#29) who invested $50 million. Conway also has a stake in Practice Fusion.
Michael Moritz (#13) and Douglas Leone (#18) both of Sequoia Capital, sold portfolio company HealthCentral, an online health site to Remedy Health Media this past November for an undisclosed price. Other investments include AirStrip Technologies which securely sends critical patient information from hospital monitoring systems and electronic health records to a clinician’s mobile device, and practice management software ZirMed. This past September, Sequoia invested in Healthcare Quality Catalyst, which provides health care data warehousing software.
Bryan Roberts (#38) of Venrock is the dean of health IT investors on the list, going back with athenahealth, a publicly-traded web-based practice management and electronic health record vendor, and RelayHealth, now part of McKesson. Last month, Venrock sold portfolio company CodeRyte, which provides medical coding information, to 3M. Castlight Health, a company Roberts co-founded in 2008, announced yesterday that it raised $100 million, bringing the total amount of funds raised to $181 million—a record for a health IT start-up. Expect to see more from Venrock with Bob Kocher on board. Kocher helped shape health care reform in the Obama Administration.
See the complete Forbes Midas List