If you take away one thing from the healthcare industry's milestones of 2014, let it be this: Digital health is where the money's at. This according to a report put out by health startup accelerator Rock Health, finding the sector crushed records this past year. 

 

2014 was a "record year" for digital health venture capital, said Rock Health's Malay Gandhi on a Jan. 7 call announcing report findings. Just look at the numbers, he said: Venture funding for digital health companies surpassed $4.1 billion in 2014, representing a 125 percent growth from the previous year. 

 

Just to put this into perspective, in 2013 that growth was a much more modest 30 percent. "The number is still staggering to us," said Gandhi. 

 

Some of the big highlights for the year?

 

There were 258 digital health companies that each raised more than $2 million last year. "This is a huge, huge number to us," Gandhi said, pointing out that for the last three years before, venture capital deal sizes for digital health had actually been on a steady decline. In 2014, deal size reversed this trend, growing 43 percent to reach $14 million. It's no surprise, then, that the number of investors entering the digital health space was also on an upward trend in 2014. 

 

"There's no question that some of the largest deals of the year drive the trends," added Gandhi. "The two that stand out to us as a little bit abnormal and surprising would be the NantHealth and Flatiron financing," he said. 

 

NantHealth, the health data platform company led by healthcare billionaire Patrick Soon-Shiong, MD, raised $375 million last year. But, as Gandhi pointed out, the company remains "a bit of a mystery," so where that money is going is still unknown. 

 

Flatiron, which raked in $130 million of Series B funding is the "biggest outlier," he said. A lot of the cash went toward the company's acquisition of Altos Clinical, an oncology EHR platform. 

 

Also to note, as Rock Health officials pointed out: The six biggest categories of the year accounted for nearly half of 2014 digital health funding.

 

Analytics and big data: $393 million

Healthcare consumer engagement: $323 million

Digital medical devices: $312 million

Telemedicine: $285 million

Personalized medicine: $268 million

Population health management: $225 million

 

"The only category that's actually remained since 2011 is healthcare consumer engagement," Gandhi said. "That trend has been unstoppable since the Affordable Care Act passed."

 

In its 2014 funding report, Rock Health included only deals that were over $2 million and companies that were at the intersection of healthcare and technology.