Some of the best-known technology investors are looking beyond their tried-and-true Internet plays to bet on health-care data as the next growth market.
Venture capital firms and portfolio managers of large mutual funds are among those investing in companies that gather and analyze health-care data, all in hopes of tapping into the shift to electronic record keeping and consumer acceptance of personal health tracking devices. Unlike biotechnology firms, which are often hit-or-miss based on the success of drugs under development, investors say these health technology firms tend to have a reliable path to profits by selling services and data to insurance companies, doctors and hospitals.
Overall, venture capital funding for health-care technology firms is up 176 percent this year, at $2.3 billion, versus the same period last year, according to Rock Health, a San Francisco-based seed funding firm. Most of the funds have gone to companies focused on payment management and data analytics.
In contrast, funding for biotechs, a sector whose rally this year has prompted the Federal Reserve to warn about a potential bubble, has increased just 28 percent this year through June 30, compared to the year-ago period.