Web 3.0 & Online Health (Part 5)

M&A and VC activity

Increased traffic and stickiness of online health sites have led to a number of deals in the current year.

In July 2007, NBC Universal and GE Commercial have jointly invested $25 million in Healthline, a fast growing health vertical.

In June 2007, Meredith, a leading media and marketing companies acquired Seattle-based Healia, a consumer health search engine.

In June 2007, ConnectivHealth acquired Nashville-based Relegent, which delivers online health care information to the hospital and education industries.

In May 2007, About.com acquired UCompareHealthCare, a healthcare ratings and compare site for $2.3 million. The deal is believed to have boosted page views and revenue growth of About.com.

In February 2007, Microsoft acquired Medstory, a healthcare search engine. Last year, it acquired Azyyxi, a consumer health portal.

Amongst earlier deals, in March 2005, WebMD acquired HealthShare Technology for $36 million. HealthShare is a supplier of decision support tools that assist in the evaluation of hospital care and quality.

In January 2005, iVillage acquired Healthology, a physician generated content supplier for $17.2 million cash and stock deal.

ConnectivHealth is funded by Petra Capital Partners of Nashville, Chrysalis Ventures of Louisville, Ky., and Scott McQuigg. ConnectivHealth recently raised $2.1 million in VC funding from these VCs.

DailyStrength, a Santa-Cruz, Calif. based social network that connects people through their health problems, has recently closed its first round of venture financing with Redpoint Ventures.

In February 2007, PatientsLikeMe, a health care social networking site raised $5 million in Series A round financing. CommerceNet, Omidyar Network, Collaborative Seed and Growth Partners, LLC and Invus, LP funded the site.

Trusera raised $2 million in seed funding from Seattle venture firm Benaroya Capital, along with TerraPass chief executive Erik Blachford, Ackerly Partners’ Christopher Ackerley, Amazon.com executive Kim Rachmeler and Washington Mutual’s corporate development executive, Craig Tall.

The above deals clearly indicate the appetite for online health sites among the large media and Internet companies.

Conclusion
According to an October 2006 study by the Pew Internet & American Life Project, 8 million people in the United States go online for health information every day, and 53% of health-seekers said that a recent search had an impact on how they take care of themselves or their dear ones.

The fact that online health is big can be gauged from the fact that the US healthcare spending is expected to reach $4 trillion by 2015 and with the baby boomers turning 60 in the next few years this could mean a huge opportunity for the major media and internet companies.

Online health has emerged as a major Internet category and health-related start-ups are being launched every other day. There are many niches yet to be filled, and entrepreneurial opportunities abound.

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[Part 2]
[Part 3]
[Part 4]

This segment is part 5 in the series : Web 3.0 & Online Health
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