2021 explosion in digital health funding is no more, but opportunities remain, new study says

Although last year’s digital health funding boom is over, startups with a thirst for capital still have opportunities, Digital Health Business & Technology reports. Digital health companies raised $3.2 billion in the third quarter. As compared to $4 billion in the second quarter of 2022, this represents a 20% drop quarter-over-quarter and a 60% drop year-over-year.

In the first nine months of 2022, digital health companies raised $13.8 billion in venture capital funding. Although the number is 40% lower than last year, the sector remains robust. There were 179 deals recorded this quarter, compared to 161 last quarter. Seed and Series A rounds are particularly active in investing.

The following are five key takeaways from Digital Health Business & Technology’s third quarter and nine-month study:

  1. In spite of last year’s record highs, funding remains resilient  
  2. New York outpaces California in total funds
  3. Health information management investment remains the most prominent
  4. Public markets haven’t been kind to recent digital health IPOs
  5. Practice-focused companies dominated M&A activity in Q3