Software companies that assist healthcare providers with managing health data have raised $3.7 billion in investment funding so far this year, up from $2 billion in the same period last year, according to a second-quarter report from market research firm Mercom Capital Group.
In 2021's second quarter, such health information management companies amassed $1.7 billion in funding from investors, down from $2.1 billion in the first quarter but up 136.5% from $709 raised during the same period last year, according to the report. Health information management companies are just a portion of a broader digital health subsector that comprises tools for healthcare providers and practices.
Most investor funding goes toward digital health companies that focus on consumers.
"There's a lot of attention, both from VCs and from media, on patient-facing technologies," said Jeff Becker, a principal analyst at CB Insights, a firm that analyzes data on venture capital and startups. "There's certainly very cool things happening in that space. But there's also innovation at the bedside."
In the second quarter, companies focused on providers and practices raised $2.4 billion, accounting for 31.2% of the quarter's total $7.7 billion in funding.