Health IT venture investments up in 2010
Healthcare IT companies garnered $460 million in venture capital in 2010, a 19 percent increase over 2009 when investments totaled nearly $388 million, according to Dow Jones VentureSource, which credits the growth to a growing market for electronic health records and other health IT.
[See also: Venture capitalists see healthcare IT as good bet.]
Overall investment in healthcare companies fell 7 percent in 2010 to $7.4 billion for 702 deals.
The industry's smallest sector, Healthcare Services, saw the strongest growth. Fifty-four healthcare services companies raised $1.2 billion, a 29 percent increase in deal activity and more than triple the capital raised in 2009.
In 2010, growth in venture capital investment was driven by capital commitments outside of the information technology and healthcare industries, which are traditionally venture capitalists' comfort zones, said Jessica Canning, global research director, Dow Jones VentureSource.
"The healthcare and IT industries accounted for more than half of venture investment in 2010 but are not currently driving the growth," said Jessica Canning, global research director, Dow Jones VentureSource. "Investment in business technologies, consumer solutions and energy companies gained the most traction in the last year."
[Medsphere among companies that drew capital: Open-source company gets $12M EHR boost.]
As usual, Canning said, biopharmaceuticals companies claimed the largest proportion of investment in the healthcare industry, with 317 deals raising $3.4 billion.
Throughout the year, a total of 2,799 venture deals raised $26.2 billion, a 6 percent increase in deals and an 11 percent increase in capital invested over 2009, when 2,636 deals raised $23.6 billion, according to Dow Jones VentureSource.
The median deal size for 2010 was $4.4 million, down from the $5 million median in 2009.