A new report from CB Insights shows that digital health funding continues to slide, experiencing its lowest funding level since the first quarter of 2019. The market intelligence firm reported that global digital health funding dropped by 36% from the second quarter to the third quarter this year, and by 72% from its record high in the second quarter of 2021, Healthcare Dive reports.
There is a particularly severe deceleration in funding for clinical trials tech, telehealth, and health IT, but telehealth and health IT remain some of the most heavily funded areas. Since the breakthrough year of 2021, the momentum for digital health appears to be slowing down. Inflation and interest rates are among the factors blamed for shrinking funding, according to industry watchers.
In the third quarter of this year, telehealth funding was halved from the second quarter. Despite declines in telehealth funding for the third straight quarter, it is still the second-lowest total in the past five years. In contrast, COVID-19 spurred unprecedented demand for virtual care, which led to an avalanche of dollars flowing to telehealth companies.
Despite this growth, telehealth funding is expected to be less than half of what it was in 2021. There was a small increase in mental health funding after two straight quarters of declines. As a result, there were 83 deals in the first quarter of 2022, 70 deals in the second, and 72 deals in the third quarter of 2022.