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- In the third quarter, digital health companies brought in $3.2 billion in venture funding, according to a report from CB Insights.
- Overall, digital health startups have accounted for about a third of venture funding since 2016, according to the report.
- The venture capital firm Data Collective (DCVC) was the most active in the space in the third quarter, according to the report.
- But it's a crowded space, with four other VC firms tied for second place and five venture firms tied for third.
- These firms have invested in startups like Freenome, which focuses on early detection and prevention of cancer, and the drug discovery company Recursion Pharmaceuticals.
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So far this year, startups in digital health have raised more than $10 billion from investors placing bets on the future of healthcare.
And while digital health remains a lucrative area for investment, a report from CB Insights shows that digital health deals have been on the decline. There were 328 deals in the third quarter, down from the same period in 2018.
Since 2016, digital health has represented an average of 31% of healthcare deals, according to the report
Amid the decline, some venture investors are still finding opportunities.
There are 10 venture capital firms that have been especially active in the space, CB Insights reports. CB Insights ranked the VCs based on the number of unique digital health company investments they had made, but the report doesn't disclose those figures.
As more investors delve into the space, five VCs ranked as the third most active in the space, with four VCs ranked as the second most active digital health firms in the space, with Data Collective taking the top spot.
Here's who they are, and what they've been betting on:
#3 - Felicis Ventures
Felicis Ventures is an early-stage venture firm based in San Francisco founded by Aydin Senkut, who used to work at Google.
The firm closed its sixth funding round in 2018 with $270 million.
The firm has an extensive portfolio across many sectors like commerce, education, and health and biotech startups.
#3 - Khosla Ventures
Menlo Park, California-based Khosla Ventures invests across a variety of industries. Healthcare is one of 17 fields the venture firm lists as places it has investments, alongside education, financial services and space.
The early-stage VC has raised a total of $2.9 billion across 9 funds, according to Crunchbase.
#3 - Kaiser Permanente Ventures
It has an extensive healthcare portfolio in digital health, drug discovery and diagnostics.
#3 - Lightspeed
The Menlo Park, California-based early-stage venture capital firm Lightspeed Ventures focuses mainly on technology and the consumer space. To date, the firm has backed more than 350 companies, which include Snapchat and DoubleClick, which was acquired by Google.
According to itsa website, since the firm's founding, over a third of the companies have gone public.
#3 - Menlo Ventures
The San Francisco-based venture capital firm Menlo Ventures is one of the earliest VC firms, founded in 1976. Menlo invests in companies from industries like technology, communications, and security.
The company's list of past investments includes more than 70 public companies, and it now has $5 billion under management. Some of its past bets include Uber, Gilead Sciences and Warby Parker.
#2 - Baidu Ventures
#2 - Optum Ventures
Optum Ventures, founded in 2017, is an early-stage venture capital firm that's part of UnitedHealth Group, the biggest US health insurer.
While Optum Ventures isn't the biggest firm on the list, with investments in just 14 companies, its focus is solely on digital health startups.
#2 - F-Prime Capital
Cambridge, Massachusetts-based F-Prime Capital is a big investor in healthcare.
Healthcare is "the largest sector of our economy and arguably the least efficient in many ways," Carl Byers, a partner at F-Prime, previously told Business Insider.
"That leads to huge opportunities to improve care while reducing cost. And people who create the technology and services in the middle can earn and should earn in terms of making that happen," he said at the time. "So it's just a great opportunity for that reason."
#2 - Qiming Venture Partners
Qiming Venture Partners is a China-based venture capital firm founded in 2006. According to the company's website it has $4 billion in assets under management.
In 2017, the company launched Qiming USA, focused on early-stage healthcare opportunities in the US and Europe.
Investments: Biotech drug discovery startup Insilico Medicine, virtual care and diagnostics platform Buoy, and virtual care platform myHealthTeams, which creates social networks for people living with chronic conditions.
#1 - Data Collective (DCVC)
Data Collective (DCVC) is a San Francisco-based venture capital firm established in 2011. It recently raised $725 million to invest in "deep tech." The firm takes the number one spot on the list for most active investors in digital health.
The firm invests in companies across multiple sectors like life sciences, agriculture, security, and computational healthcare.
Investments: Early cancer detection startup Freenome, drug discovery company Recursion Pharmaceuticals, synthetic biology company Ginkgo Bioworks, diagnostics company Lucira Health, and Canadian-based biotech company Sequence Bio.
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