Digital health funding remained buoyant in July
Investment in digital-health companies slipped to $149.3m in July, compared with a monthly average of $212m in the first half of the year, but still a solid figure for the summer. Chicago-based Endotronix landed the largest sum, raising $32m for devices to manage heart failure and remotely monitor cardiac patients. UK digital health start-up Big Health won $12m, NightBalance, which makes a sleep apnea device, raised $13.9m, and Akili Interactive Labs, whose video game helps cognitive conditions, raised $11.9m. Among the investors was Russian billionaire Roman Abramovich and Blue Heron Capital.

During the month of July, MobiHealthNews reported on 16 digital health companies that raised venture funding. The deals total $149.3 million, which is lower on average when compared to other months this year so far but that's expected for the slower news cycle in the summer.

In the first half of 2016, MobiHealthNews tracked funding for digital health companies that totaled $1.27 billion, as we reported in our Q1 and Q2 funding roundups.



Nikhil Krishnan, a research analyst at investment-focused firm CB Insights, led a webinar focused on digital health just this week.

“Hype around the digital health space has not slowed down,” Krishnan said during the webinar. “Funding has remained healthy, but early-stage deal share has dropped with more scrutiny towards smaller companies. But more investors continue to see opportunity, and we’re seeing more unique investors.”

Additionally, Krishnan noted companies are disrupting the existing channels to patients.

“More companies are specifically targeting patients themselves,” Krishnan said in the webinar. “Many of them are entirely bypassing the existing legacy infrastructure of the hospitals and they are building their own processes and data sets.”

Competition in the telemedicine space is also increasing. Since many telehealth companies have not raised money in the past year, Krishnan expects many to be doing that soon.

“Telemedicine is critical to help people in rural areas who might now have a lot of access, but there is also a lot of use for those with chronic diseases that can me mitigated or managed better,” he said. “This is especially important, because now that we are prioritizing population health more aggressively, having additional monitoring for those that are more sick, this is a significant effort in reducing healthcare costs.”

Here are the funding deals that MobiHealthNews tracked during July:

New York City-based Nomad Health, a startup that is building an online marketplace connecting doctors with freelance clinical work,raised $4 million in Series A financing. First Round Capital and RRE Ventures led the funding round, with participation from .406 Ventures. The funding will Nomad continue its nationwide rollout of its system that seeks to replace temporary work brokers in the healthcare industry. Currently in beta testing, Nomad is a website where doctors and nurses can search for temporary work and hospitals and clinics can get temporary staffing. The goal, CEO and co-founder Alexi Nazem said, is to replace brokers altogether. More

Reston, Virginia-based Avizia has raised $11 million in Series A funding, bringing the telemedicine company’s total funding to $19.5 million. The funding round, led by Blue Heron Capital, also included Lavrock Ventures, NextGen Venture Partners, Middleland Capital, Waterline Capital and Blu Ventures. The funding will be used to expand the company’s telehealth offerings. More

Atlanta, Georgia-based Azalea Health, a health IT software firm with a focus on rural practices and mobile tools, raised $10.5 million in Series B funding in a round led by Kayne Anderson Capital Advisors. Previous investor Intersouth Partners also participated in the round, which brings the company's total funding to $12.5 million. Azalea's software suite includes revenue cycle management tools, an electronic health record, telehealth tools, a patient portal, and a patient-facing mobile app which recently integrated with Apple HealthKit and with Fitbit. More

Israel-based DreaMed Diabetes raised $3.3 million from Norma Investments, Russian businessman Roman Abramovich and one other unnamed angel. The funds will mainly be used for further development of DreaMed’s Advisor, the company's decision support software that can be licensed and embedded into partners' diabetes management platform. More

Digital medicine company Akili Interactive Labs, which makes a therapeutic video game to treat cognitive conditions, expanded its Series B funding and got another $11.9 million, adding new investors into the round and bringing the series total to $42.4 million. The Dutch subsidiary of Merck Ventures, known as M Ventures in the US and Canada, and the venture arm of Amgen joined existing investors, which include Pfizer and Shire Pharmaceuticals. This means Akili now has relationships with four major biopharma companies or their investment affiliates. Previously, the Boston-based Akili raised $30.5 million. More

Stockholm-based digital health company Lifesum secured $10 million in a funding round led by venture capital firm Nokia Growth Partners. Draper Esprit, Bauer Media Group and SparkLabs Global Ventures also participated in the round, which will enable the Swedish health app maker to expand growth of its personal wellness-tracker Europe and the US. More

Sleep apnea device developer NightBalance announced today it has raised $13.9 million (EU €12.5 million) in second round funding led by INKEF Capital and Gilde Healthcare Partners. The Dutch company will use the funds to further advance the rollout of its Sleep Position Trainer (SPT) device and enter the US market. More

Big Health, the UK digital health startup behind sleep health app Sleepio, raised $12 million (9.5 million pounds) in a round led by Octopus Ventures. Kaiser Permanente Ventures also contributed to the round, as did Omada Health CEO Sean Duffy, returning investor Index Ventures, and JamJar Investments. The startup's app is not direct-to-consumer, Big Health sells its sleep health program and app to employers. The company's first and so far only offering, Sleepio, is in use with employee populations at Comcast, LinkedIn, Boston Medical Center and Henry Ford Health System. More

Akron, Ohio-based Intellirod Spine, a sensor-enabled spine implant company, raised more than $1 million in a round led by new and existing investors, including Queen City Angel First Fund V and JumpStart. Previous investors include the Kentucky Seed Capital Fund and the City of Akron, Ohio. Intellirod Spine is developing wireless sensors that will measure the strain being put on implanted spinal fusion rods. Data from these sensors, which use RFID technology, will help surgeons monitor the post-operative progress of patients. The company is currently developing two products. More

Adherium, a Melbourne, Australia-based connected inhaler company, raised $5.9 million ($8 million Australian) through a private placement of shares with Fidelity. Adherium is publicly traded in Australia. Under the deal, Fidelity will purchase 16 million shares at $0.50 Australian per share, bringing the global asset manager's share in the company to 10 percent. Adherium's Smartinhaler sends data on when medication was taken to mobile devices and desktop computers via Bluetooth. The platform is designed to help patients, caregivers, and physicians remotely monitor and manage patients’ adherence to their medication. More

Caremerge, the Chicago-based company offering care coordination software for assisted living facilities, raised $14 million in funding. Insight Venture Partners led this funding round, which will enable Caremerge to expand in the post-acute care market. Additional funders were previous investors Grazyny Kulczyk, Cambia Health Solutions, Ziegler LinkAge Longevity Fund, GE Ventures and Arsenal Venture Partners. The company, which bills itself as a person-centered connector across the care continuum, debuted in 2012 and provides a HIPAA-compliant platform that allows for communication between older patients and their hospitals, ACOs, physicians, long-term care providers and families through a common portal. More

Minneapolis-based Sansoro Health, a health IT firm focused on interoperability that offers, among other things, software to integrate digital health tools with electronic health records, raised $1.2 million in a round led by Healthy Ventures. The raise included backing from Treehouse Ventures and undisclosed angels. Healthy Ventures is an investor that works exclusively with health tech companies including HealthCrowd and PokitDok. Sansoro plans to use the funding to expand its team and marketing efforts for Emissary, a middleware product that hospitals can use to connect third party software -- including mobile apps and patient portals -- to EHRs. More

Nashville, Tennessee-based Medaxion, makers of a mobile-based EHR offering for anesthesiologists, raised $950,000, according to an SEC filing. That brings the company’s total known funding to at least $7M to date. Medaxion has two offerings for anesthesiologists – Medaxion Pulse and Medaxion Q. Pulse helps anesthesiologists document patient data and communicate with other team members. More

Boston-based Docent Health raised $15 million in a new round of funding. The round was co-led by Bessemer Venture Partners, New Enterprise Associates (NEA), and Maverick Ventures. All three investors previously participated in the company's $2 million seed round in January. The startup, which grew out of healthcare investment firm Oxeon Holdings, combines mobile software tools and trained human interlocutors to improve the consumer experience for its hospital partners. More

New York City-based Force Therapeutics raised $2.6 million, according to an SEC filing. This brings the company's total funding to date to about $4.8 million.Force Therapeutics developed a mobile and web-based program that can be prescribed to patients who are taking part in musculoskeletal injury rehabilitation by their surgeon, physician, or therapist. The app, called Force Patient, which is available on iOS and Android devices, helps patients access home exercise videos, log their compliance, read educational materials, purchase recommended gear, and receive messages from their care team. More

Chicago-based Endotronix, which makes devices to manage heart failure and remotely monitor cardiac patients, raised $32 million in new funding. Investors included BioVentures, SV Life Sciences, Lumira Capital, Aperture Venture Partners and OSF Ventures. Existing investors as well as an unnamed corporate investor also participated. This brings Endotronix's total funding to date to $50 million. More