In the US, access to healthcare could reach millions of new consumers with the passage of the Affordable Care Act next year. Investors have bet on start-ups that offer transparency in healthcare costs, crucial to improve efficiency for patients, providers, hospitals and insurance companies.
400$M for 49 financing operations
According to CBinsights, Venture Capital has invested more than 400$M in 49 transactions since 2010. Most of the deals have gone to mature or later-stage companies such as Castlight Health which has raised 160$M among different investors, among them U.S. Venture Partners and Venrock. "Castlight is revolutionising cost transparency in the sector. It offers an aplatform with all the information about medicines, their costs, benefits and alternatives," says Diego Gutierrez, Corporate Finance expert at ABRA INVEST.
Another relevant case is the health insurance comparator Gohealth, which raised 50$M of Norwest Venture Partners in 2012.
47% of operations in seed investments
Although the volume of investment is geared towards later stage companies, the number of deals is mainly concentrated in seed stage startups. In 2012, 47% of deals were seed or angel stage with funds such as Rock Health, 500 Startups and StartUp Health. 2013 saw a continuation of this trend, with 67% of deals in A or seed stage such as Maxwell Health Lerer Ventures-backed) and PokitDok, backed by New Atlantic Ventures and Rogers Venture Partners.
Promocionesfarma, a Spanish case in the sector
PromocionesFarma is an online bargain website where it offers its customers significant discounts on health and beauty products that are picked up at the most convenient local pharmacy with no delivery charges. "At the moment it is focusing on parapharmacy products, but if legislation changes in its favour we could see it selling medicines in the future," says Diego Gutierrez.
At the beginning of 2013 it received a second round of funding for a value of 1.5 million Euros, bringing its total investment to 3 million Euros in the last year and a half. This second round was led by Kibo Ventures, and complemented by VitaminaK and investors who were already part of the company.
