Despite investor fears of a telehealth slowdown, the market banked a record-setting $5 billion in 163 funding deals in the second quarter of 2021.
Global telehealth investment rose for the fourth consecutive quarter, growing 17% quarter over quarter and 169% year over year, according to a new report from market intelligence company CB Insights.
The nascent telehealth space is beginning to show signs of maturity, as, so far in 2021, early-stage deals are tracking at a historical low while late-stage deal share is at a high, the report said.
In the second quarter, the top five deals alone were worth $1.6 billion, representing 30% of quarterly funding.
At the top of the list, Noom, an app that helps people lose weight by focusing on behavior change, bulked up with $540 million in a series F funding round led by new investor Silver Lake. Other new investors participated in the round including Oak HC/FT, Temasek and Novo Holdings. Existing investors Sequoia Capital, RRE and Samsung Ventures also participated.
The digital health company saw rapid growth in 2020 as people looked to shed pandemic-fueled pounds, and it’s now looking to expand beyond weight loss to areas such as stress and anxiety, diabetes, hypertension and sleep.
Swedish digital health startup Kry raised a hearty €262 million, or about $312 million, in a series D funding round in April. The newest influx of funding was led by the Canada Pension Plan Investment Board and Fidelity Management & Research. Other participants included the Ontario Teachers’ Pension Plan, Index Ventures, Accel, Creandum and Project A.
Kry, known as Livi in the U.S., U.K. and France, offers a software platform and companion smartphone app connecting patients and providers via video and instant messaging consultations, Fierce Biotech reports. The platform has been used by more than 3 million patients since its 2015 founding, according to the company.
Also in April, digital pharmacy startup Capsule banked $300 million in new capital funding that raises its valuation to more than $1 billion. Durable Capital Partners led the funding round and was joined by new investors Baillie Gifford, T Rowe Price, and Whale Rock.
Portable diagnostic developer Cue Health brought in $235 million in new financing in May to spin its portable COVID tests into a broader menu of point-of-need diagnostics. The startup attracted new private investments from Perceptive Advisors, MSD Capital and Koch Strategic Platforms and brought back its previous backers Johnson & Johnson Innovation, Decheng Capital, CAVU Ventures and ACME Capital, among others, Fierce Biotech reported.
More recently, in June, high-flying startup Lyra Health, a provider of mental health benefits for employees, banked $200 million in new funding to raise its valuation to a reported $4.6 billion. Investor hedge fund Coatue Management led the round and was joined by new investor Sands Capital, along with existing investors.
Here are five other telehealth trends in the second quarter highlighted in CB Insights’ report:
Telehealth exits reach record high: There were 42 telehealth exits in the second quarter, driven largely by M&A activity with 35 deals. While all telehealth segments saw acquisitions during the quarter, the two biggest hot spots were virtual/digital care enablement and telemedicine providers, platforms and marketplace.
Some of the most notable M&A deals include…