While it’s the IPOs of big-name tech firms that are making the headlines, a wave of smaller digital health startups are transforming the health care industry and are likely to go public sometime over the next 12 months. They may not be all that well-known, but these startups have been in operation for close to a decade or more and are garnering investors’ attention (and cash), according to Business Insider.

Nine of these digital health startups include ZocDoc, 23andMe, HeartFlow, Modernizing Medicine, Livongo, Health Catalyst, Change Healthcare, Phreesia, and Peloton. Among that list, the last five have already recently announced plans to go public, ending a multi-year drought of public offerings in the industry.

“Now we’re seeing a group that is mature enough for investors to take an interest in,” said Bill Evans, CEO and managing director of Rock Health. “The public markets are beginning to understand that these companies are transforming healthcare. They’re realizing that there’s a lot of value to unlock.”

What it Means for Investors

Through the first half of 2019, digital health companies have raised as much as $4.2 billion across 180 deals. If the pace of that funding continues through the last half of the year, it could reach a record-breaking $8.4 billion. Of that financing, 69% is coming from return investors, a sign of a maturing investment sector that isn’t just receiving a flood of cash from new, inexperienced investors, according to Rock Health

Since 2011, $36.3 billion has been invested in digital health startups. The main exit option for investors to realize the return on their investments has been through mergers and acquisitions (M&As). Of the $36.3 billion total invested, $4.1 billion has been realized through M&As compared to just $1.3 billion for IPOs, with 2016 being the year of the industry’s last IPO. But with some startups already having announced plans to go public and others looking ripe for an IPO, that is about to change. 

California-based consumer genetics and research company, 23andMe, was founded in 2006. The firm sells DNA-testing kits that allow customers to send saliva samples to its lab. The results provide ways for customers to explore their ancestry and check for genetic markers of hereditary diseases and the likelihood of developing other potential health problems. 23andMe has raised $792 million so far and is valued at $2.5 billion, according to Barron’s.

Zocdoc, based out of New York City, is an online medical care appointment booking service founded in 2007. The company’s service allows patients the ability to book appointments with doctors online, and can often be seen with 24 hours. About six million patients use the service every month, and the company is valued at around $2 billion with Jeff Bezos as one of its high-profile backers, according to CNBC.

Medical technology company HeartFlow was founded in 2007 and its mission is to change the way cardiovascular disease is both diagnosed and treated. The company developed software that takes a CT scan and creates a personalized 3D model of the patient’s coronary arteries in order to see if they are blocked. The company serves patients worldwide and is valued at $1.56 billion.

Looking Ahead

Of the $36.3 billion venture capital invested in digital health startups since 2011, $29.4 billion has yet to find an exit option, meaning there is still a lot of value in the industry remaining to be unlocked. Some of that unlocking will come from the startups who have recently announced plans to go public this year, while others will come from continued M&A deals, but investors should monitor the other mature firms that are likely to announce plans for a public offering over the next year.