Health Care Start-Ups Rake In Record Money in 2014

Toshima-Ku, Japan, January 13, 2015 (Newswire.com) - Money is surging into start-ups that focus on the intersection of health care and technology. In 2014, venture funding for these start-ups hit a record $4.1 billion. That was a 125 percent year-over-year jump, according to Rock Health, which provides seed funding for start-ups and conducts research in this area.

Those working in this sector say health care is undergoing a technology transformation with a range of start-ups aiming to make the industry more efficient, convenient and cost effective.

"Technology can improve the quality of care dramatically," Malay Gandhi, managing director of Rock Health, said. "It’s time has come."

One such company is Omada Health, which connects those at risk for chronic disease like diabetes to a comprehensive lifestyle change program that includes a personal health coach and digital support group.

Sean Duffy, the company's CEO, said start-ups like his are attracting attention and money, in part because there is now a new generation of entrepreneurs who are passionate about health care and tech.

"I worked at Google before going to medical school," Duffy said. "I love technology. I love health care. You have entrepreneurs who are able to combine both. The venture capital and investing community sees the chance for the next wave of folks to take health care to a digital era."

So, which start-ups in this space are most likely to go public this year?

Those tracking the space point to several candidates, including Fitbit, the maker of fitness trackers; ZocDoc, which allows users in all 50 states to find and book appointments online with doctors; Practice Fusion, a cloud-based electronic health records provider; Proteus, which makes ingestible sensors; and 23andMe, which provides genetic reports about users' ancestry and family history. (Fitbit, 23andMed and ZocDoc declined comment. A spokesperson for Practice Fusion said: "An IPO could definitely be in Practice Fusion's future.")

ALJA are currently in discussions with several health focused companies and are developing strategies to take them to the next level and beyond.