Fitbit's and Veeva Systems' multibillion-dollar IPOs have buoyed the digital health space
The increase in the overall funding of the digital health industry has had a knock-on effect as a series of digital health IPOs have followed. In 2014, the digital health industry generated $3.5bn﻿ whilst it had 30 exits which included four﻿ significant IPOs: Care.com, Imprivata, Everyday Health and Castlight Health. Between 2010 and 2014 there has been a dramatic increase in the exit of US-based digital health companies, rising from six﻿ in 2010 to 30 in 2014.

Exits like Fitbit's and Veeva Systems' multibillion-dollar IPOs have buoyed the digital health space.

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Overall funding to the digital health industry hit $3.5B in 2014, and the same year delivered a spate of digital health IPOs. We used CB Insights data to analyze recent exit activity in the space.

Overall digital health exits have been on an upswing, even as IPOs remain relatively infrequent. In 2011, there were just 8 exits of US-based digital health companies, but by 2013 there were 23, and 2014 saw 30 exits. The 2014 exits included 4 major IPOs: those of Care.com, Imprivata, Everyday Health, and Castlight Health (the last was one of three digital health $1B+ IPO exits since 2010, at $1.4B). There were no IPOs in 2013, and just one in each of the previous two years.

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The quarterly breakdown brings the recent upsurge in exits into clearer focus. 2015 is shaping up to be as robust in overall exit activity as the previous year, with 15 exits already. However, IPO activity has not been strong. The first and only IPO in 2015 so far was Fitbit’s in Q2’15. The largest 2015 acquisition so far was that of MyFitnessPal by Under Armour, for $475M.

Out of the top exits with disclosed valuation amounts, 7 are IPOs and 3 are acquisitions. The biggest exit was the IPO of Veeva Systems, which is also one of the most capital efficient exits in the US. The top 3 exits were $1B+ exits, with Fitbit coming in second being valued at $4.1B at the time of its IPO. Since then, the stock has grown significantly, trading with a market cap about $8B (as of September 22, 2015).

Top VC-Backed Digital Health Exits by Valuation: 2010 – Q2 2015 Rank Company Exit Valuation (M) 1 Veeva Systems IPO $4,400 2 Fitbit IPO $4,100 3 Castlight Health IPO $1,400 4 Care.com IPO $506 5 MyFitnessPal Acquired by Under Armour $475 6 CardioMEMS Acquired by St. Jude Medical $455 7 Everyday Health IPO $415 8 Epocrates IPO $357 9 Imprivata IPO $342 10 Humedica Acquired by Optum $300

*Analysis was of first exits only



Photo credit to NEC Corporation of America

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