Healthcare information technology is leading a venture-capital boom in Nashville, according to a study by the Nashville Health Care Council and Nashville Capital Network.
Between 2005 and 2015, venture capitalists poured $940 million into emerging Nashville companies, many of them IT related. Venture capital funding in healthcare IT companies has grown from $2 million in 2009 to a peak of $62.5 million in 2014.
IT surpassed healthcare services in 2012, making it the largest category in which investors are putting seed money to develop healthcare companies in Nashville.
“Early success often increases a company's capital requirements beyond the scope of individual angel investors. Therefore, local venture resources focusing on the early-stage rounds are necessary to maintain a healthy capital continuum,” said Sid Chambless, executive director of the Nashville Capital Network, a network of 130 investors.
In the second quarter of this year, healthcare IT was the second-most active subsector for mergers and acquisitions among healthcare companies, according to Modern Healthcare data. Medical-device companies tied with IT at 25 deals.
One of the biggest deals of the quarter was McKesson Corp.'s decision to merge its healthcare IT unit with Change Healthcare of Nashville to create a company with $3.4 billion in combined revenue.