The last year was a good one for digital healthcare investment, with the dollars poured into healthcare companies growing by 32.1% in 2017 to $5.8 billion from $4.4 billion in 2016, says research and investment firm Rock Health.

That’s in line with recent growth. Over the last six years digital healthcare investment grew at a compound annual growth rate of 31.9%, Rock Health says.

“Looking back over 2017—and the seven years since we began tracking funding in 2011—it’s clear that the early game has concluded and digital health is entering the ‘middle innings’ as an investment sector,” says Rock Research consultant Rachana Jana. “We’re at the end of the beginning of digital health.”

Investors did not, however, cash out very often in 2017 via their portfolio companies going public or being acquired, Rock Health says. “While investor appetite certainly increased in 2017, exits waned with only 119 disclosed acquisitions of digital health companies and a surprising zero IPOs,” says Rock Health researcher Megan Zweig. “However, there are more highly-capitalized, privately-held companies than ever, and investors are anxious for potential exit opportunities.”

Consumer health and wellness companies attracted the most investor interest last year. That segment, which includes a range of companies that develop health and wellness web tools and programs—drew nearly twice as much funding as any other category. Investors put $1.6 billion into digital consumer health and wellness deals in 2017 compared with $811 million for clinical decision support and precision medicine, $752 million from fitness and wellness, $517 from disease monitoring and $498 million for disease diagnosis.

“Large tech companies view this space as ripe for innovation,” Rock Health says its annual funding report. “Amazon is exploring the use of Alexa’s voice-enabled technology to deliver health information for common issues, and Apple is working to make the omniscient iPhone a central location for patient health records.”

There were eight big investor deals in 2017 valued at over $100 million. But most of what Rock Health calls “mega” deals happened in the first half of the year. Seven deals occurred before the end of June and only one after. The biggest deal of the year was the $500 million that Outcome Health, a Chicago company that develops health and wellness content for digital devices and screens in doctor offices, raised in May from Goldman Sachs and other investors.

Since raising its biggest round of capital to date, Outcome Health in November was hit with a lawsuit from some investors and subpoenas from the U.S. Department of Justice over allegations the company mislead advertisers. “It’s hard to predict the repercussions of the Outcome Health allegations on the industry, but they may result in increased investor scrutiny,” Rock Health says its annual funding report.

Following Outcome Health, the next largest investor deals were for Penelton, a maker of indoor cycling equipment with digital screens and related content, and genetic testing kits maker 23andMe. Penelton raised $325 million in May and 23andMe raised $250 million in September.

“It’s worth noting that the record year in digital health funding occurred even in the face of substantial political turmoil, with healthcare policy playing a leading role in a hard-fought, high-stakes political battle at a national level,” Rock Health says. “Conventional wisdom would expect this backdrop to surround a market crash or credit crunch—not a banner year. All of this points to a committed (or at the very least, dogged) investor base.”

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