Investment in digital-health companies continued to smash records with $14.7 billion pumped into the U.S. sector in the first half of the year, already more than in all of 2020.
The first two quarters of the year were the biggest ever for the country’s digital-health funding, according to a report from Rock Health. Almost 60% of the funding from 372 investments made so far were for $100 million or more, the report said.
Virtual health-care visits skyrocketed during the Covid-19 pandemic, with the rate of Americans who reported at least one telehealth appointment tripling to 60% by March from last year, according to a survey by marketing firm Sykes Enterprises Inc. Even as Covid-19 wanes in many regions and in-person health services reopen, investors are continuing to pour funds into digital health.
First-Half Lead
US digital health funding is up more than 1200% in the last decade
Source: Rock Health
.chart-js display: none;
“The pandemic accelerated the rate at which consumers use digital-health solutions, and investors have followed in behind with increased funding,” said Bill Evans, chief executive officer of Rock Health.
Bigger Deals
Digital health offerings include services such as remote connections to doctors and nurses via smartphone, internet pharmacies and access to medical records. The pandemic accentuated interested in the field, which has been attracting increasing attention every, Evans said. Ten years ago, funding totaled $1.1 billion, which was roughly the amount raised in two weeks of 2021.
Noom Inc., which offers a behavioral weight loss app, raked in $540 million this year, while online pharmacy Ro raised $500 million. Some companies are using the funds from large funding rounds to acquire smaller, complementary firms, Evans said.
“It’s a natural thing for companies to do –– there’s a sizable cohort of companies founded in an earlier era that have built products that might fit better on a larger commercial platform,” he said.
Feeling Overwhelmed
Some customers have reportedly begun to feel overwhelmed by the variety of digital health offerings, feeding a rise in mergers and acquisitions among companies consolidating services. Big tech is in on it, too, as giants like Google and Microsoft Corp.continueadding digital-health services to their massive platforms.
Most big companies seeking to integrate digital health, like CVS Health Corp. and Walmart Inc., are looking to partner with or acquire existing companies rather than trying to innovate from within, Evans said.
“I don’t think that’s going to fade away,” he said. “They’re going to continue to look for ways to capitalize on these investment trends.”
Exits via capital markets rose to 11 so far this year, compared to seven in all of 2020. While investors are excited by the increased pace, many are especially cautious of early-stage companies with high valuations, Evans said.
“Companies that raise too much too quickly, or at too high a valuation, risk limiting their access to capital when that happens,” he said.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
