According to the latest study from CB Insights, the first half of the year has been pleasant for the healthcare area for those startups searching for financing, as the industry has seen a record cash flow.
Healthcare businesses have raised $26.9 billion worldwide over the first six months of 2019, compared to $26.5 billion over the same period in 2018. Over the second quarter of the year, AI-focused businesses in the room also saw a fresh financing high as investors zero in the evolving presence of the technology.
Over the second quarter of the year, healthcare AI firms raised $864 million. A substantial part of that amount came from $200 million raised in May by Tempus, a data-driven precision medicine firm. There were 75 deals for AI in the second quarter. Although in the first quarter this is slightly below 78 deals, in the second quarter the values were much higher. Funding for the industry reached $579 million for the first quarter.
The news is also being made by higher financing rounds. At the start of August, a UK-based AI health services firm, Babylon Health, raised $550 million in a round of Series C financing.
BlackThorn raised $76 million during the health care AI quarter, Frontier Medicine raised $67 million, Path AI raised $60 million, and Finch Therapeutics raised $53 million.
In addition to sky-high financing rounds, more cash is flowing into medical image processing-focused AI businesses, including Path AI, which utilizes pathology instruments driven by AI.
Deal counts for venture capital-backed healthcare deals and funding for the rest of the year are likely to reach an all-time high in 2019, predicted by CB Insights. Digital health was the predominant sub-sector in health care VC agreements, representing 32% of all health care agreements. That’s down from 33% in 2018, 36% in 2017, and 37% in 2016, though.