Healthcare IT Funding and M&A

Q2 2015 Healthcare IT Funding and M&A Executive Summary Executive Summary Healthcare IT Funding and M&A 2015 Second Quarter Report Funding and merger & acquisition activity for the Healthcare IT / Digital Health sector http://www.mercomcapital.com 1 Copyright 2010-2015 Mercom Capital Group, llc www.mercomcapital.com hit@mercomcapital.com

About Mercom s Healthcare IT Funding and M&A Report Mercom was one of the first research firms to track funding and M&A activity in the Healthcare IT sector, starting in 2010. We refer to the industry as Healthcare IT while others use terms such as digital health or ehealth, among others. Here is how our report is different: Our report includes deals of all sizes globally to present a complete picture of Healthcare IT funding and technology trends. As an independent research firm, we have no conflicts of interest with companies covered in this report. This is the most comprehensive report covering funding and M&A deals of all sizes, globally. The trends revealed in this report give a more complete picture of the industry. This report does not cover bioinformatics and medical devices. All charts, graphs and trends are clearly categorized and defined by technology and subtechnology groups. This report includes concise deal information for every transaction. This report covers historical trends. As the industry evolves, our report evolves with it and we continuously improve the information, analysis, charts and trends covered every quarter. Our subscribers include companies and executives from venture capital, private equity, investment banking, healthcare, healthcare IT (aka digital health and ehealth), insurance, healthcare associations, universities, tech firms and more. Audience Venture Capital/Private Equity Investment bankers Healthcare IT, digital health Why they like our reports leads from early-stage deals, technology trends leads for funding and M&A deals, investor leads sector trends, investor targets (by funding behavior, including technology, technology partnership targets, and more) Insurance companies Large healthcare & Tech firms acquisition leads, investment leads, technology partnerships acquisition leads, R&D partnerships, investment leads The report covers the technologies listed below and the sub-technologies under them. 2 Copyright 2010-2015 Mercom Capital Group, llc www.mercomcapital.com hit@mercomcapital.com

Q1 2015 Healthcare IT Funding and M&A Executive Summary SELECT KEY FINDINGS Venture Capital Funding in Healthcare IT companies in Q2 2015 rose to $1.2 billion in 138 deals compared to $784 million in 142 deals in Q1 2015. Healthcare IT VC Funding Q2 2014-Q2 2015 1,800 212 250 1,500 1,200 159 134 142 138 200 150 900 600 100 300 0 1,714 956 1,212 784 1,197 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 50 0 Disclosed Amount ($M) No. of Deals Source: Mercom Capital Group, llc Healthcare practice-focused companies, comprising Health Information Management (HIM), Service Providers, Revenue Cycle Management and Security companies, raised $473 million in 41 deals. Of practice-focused companies, HIM companies raised $391 million, Service Providers raised $63 million and Security companies raised $19 million. Revenue Cycle Management companies had no deals this quarter. Consumer-centric companies, which include Mobile Health, Telehealth, Rating/Shopping, Personal Health, and Social Health companies, captured $724 million in 97 deals. Of consumer-centric companies, Mobile Health companies raised the most funding with $214 million, followed closely by Personal Health companies which raised $209 million. Telehealth companies raised $152 million, Rating & Comparison Shopping companies raised $149 million and Social Health companies raised $100,000. 4 Copyright 2010-2015 Mercom Capital Group, llc www.mercomcapital.com hit@mercomcapital.com

Healthcare IT VC Funding Q2 2015 (By Technology) 450 37 40 400 35 350 33 30 US$ in Million 300 250 200 150 20 18 20 25 20 15 Disclosed Amount ($M) 100 6 10 50 0 391 214 209 152 149 63 Health Information Management Mobile Health Personal Health Telehealth Scheduling, Rating & Shopping Service Providers 2 2 19 0.1 Security Social Health 5 0 Source: Mercom Capital Group, llc Telehealth, Personal Health/Wellness, and Rating, Comparison and Shopping companies all had their best fundraising quarter. The Top 5 VC deals this quarter were the $200 million raised by NantHealth, Virgin Pulse s $92 million raise and the $50 million each raised by Doctor on Demand and MDLIVE. There were 15 countries with Healthcare IT VC funding activity this quarter. Most of the funding came from the United States (80 percent). Within the United States, 37 deals originated in California, followed by New York with 13 deals and Massachusetts with 11. There were 39 early stage deals funded that were $2 million or below, including nine Accelerator/Incubator deals. A total of 271 investors participated in funding deals in Q2 2015. Announced debt and public market financing in Healthcare IT was $1.6 billion in 8 deals this quarter compared to the $975 million in seven deals in Q1 2015. 5 Copyright 2010-2015 Mercom Capital Group, llc www.mercomcapital.com hit@mercomcapital.com

There were four IPOs in Q2 2015. M&A activity in the Healthcare IT sector in Q2 2015 totaled 53 transactions (eight disclosed) compared to 56 transactions (14 disclosed) in Q1 2015. 6 Copyright 2010-2015 Mercom Capital Group, llc www.mercomcapital.com hit@mercomcapital.com

TABLE of CONTENTS Introduction..... 3 Key Findings.. 5 2015 Healthcare IT Funding and M&A.. 9 VC Funding 2010-2015 YTD. 9 VC Funding by Quarter.... 10 VC Funding by Technology. 11 VC Funding by Sub-Technology 12 Health Information Management..... 13 Mobile Health...... 18 Personal Health......... 24 Telehealth....... 26 Scheduling, Rating and Shopping...... 30 Social Health...... 32 VC Funding by Stage...... 33 VC Activity by Country..... 34 VC Activity by U.S. States. 35 Trends in VC Funding Large vs Smaller Deals... 37 Top VC Funding Deals......... 38 Top VC Investors....... 39 Accelerators/Incubators...... 40 VC Deals.... 41 VC Investors........ 54 Debt and Public Market Financing. 68 Debt and Public Market Financing Activity...... 69 Debt and Public Market Financing Investors... 69 Initial Public Offering (IPO)... 70 Mergers and Acquisitions (M&A).. 73 M&A by Technology..... 74 M&A by Sub-Technology............ 75 Multiple Acquirers..... 76 Top Five M&A Transactions.... 77 Disclosed M&A Transactions... 78 M&A Transactions by Country... 79 M&A Transactions.... 80 7 Copyright 2010-2015 Mercom Capital Group, llc www.mercomcapital.com hit@mercomcapital.com

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