The US healthcare industry represents more than $3.5 trillion in annual spend, according to PitchBook data. With that amount of capital in play, it’s not surprising the VC ecosystem has become a vital incubator of innovative healthcare technologies that aim to address and capitalize on the evolving demands of the industry.
Last year alone, VC funds invested a total of $11.3 billion across 1,070 healthtech deals in the United States. And while that number is down 3.4% from 2017 levels, we expect the sector to remain a robust segment of the market with a long runway of growth ahead of it.
As consumers and industry participants become more aware that traditional, provider-based medicine isn’t keeping up with the increasing demands for health services, new and innovative healthtech services will continue to gain market share. The entrance of more large, non-traditional providers to the market—such as Walgreens, CVS, and Target—will also impact the sector, provided they continue to offer cheaper and more convenient care. Americans’ increasing focus on the merits of universal healthcare and other regulatory mandates that incentivize the adoption of new technologies has the potential to accelerate growth within the industry as well.
Here’s a quick look at the highest valued VC-backed companies in the United States that are helping shape the space.
1. Outcome Health
Offering exam-room technologies that engage patients and caregivers as they wait to see their provider, Outcome Health enables providers to better communicate conditions and treatment options by engaging patients with clinical trial education as they receive care.
Provider of an online health insurance network designed to make insurance simple and intuitive, Oscar serves patients and its healthcare provider network through telemedicine consultations, offering free generic medications for members and enabling patients to speak with the doctors at a discounted rate.
Developer of a healthcare data-analytics platform designed to improve patient outcomes, Tempus’ library of molecular and clinical data provide genomic sequencing services that empowers users to make real-time, data-driven decisions.
4. Essence Group Holdings
A cloud-based electronic medical record and revenue cycle management software for small physician groups, Essence Group Holdings helps its clients offer wellness, care coordination, personal services, pharmacy and mail-order pharmacy services to their patients.
5. ZocDoc (Tie)
ZocDoc is an online health platform that helps users quickly find and book doctor and dentist appointments, see what other patients have to say about prospective care providers and allows them to get reminders for their upcoming appointments.
5. Devoted Health (Tie)
Devoted Health’s digital healthcare platform provides personal guides, contracts, and HMO and Medicare Advantage plans that help insurance providers and patients work closely with physicians to avoid unneeded medical procedures.
Want to learn more about the current state of the US venture industry? Read our 1Q 2019 Private Market PlayBook.