Trends in Digital Health Funding

Q1 2025 Digital Health Funding Hits $3B as Partnering and Channel Strategies Drive Bold Moves: 🔘U.S. digital health funding hit $3B in Q1 2025 across 122 deals, with average deal size jumping to $24.4M from $15.5M in Q4 2024 🔘Early-stage rounds (Seed, Series A/B) made up 83% of deals, including large raises like Hippocratic AI $141M Series B and OpenEvidence $75M Series A 🔘Late-stage megadeals returned, with Innovaccer ($275M), Abridge ($250M), and Qventus, Inc ($105M) driving the Series D+ median to $105M—the highest since 2021 🔘“Tapestry weaving” (strategic M&A to stitch new capabilities into existing offerings) grew, e.g. H1 acquiring Ribbon Health to expand into payer/provider products, hims & hers acquiring Trybe Labs to add at-home testing 🔘Modular tech stacks (flexible, swappable tech infrastructure) gained traction, e.g. Ping An Health integrating DeepSeek AI within a month; Lumeris using 60+ interchangeable LLMs in its agentic AI platform ‘Tom’ 🔘Channel partnerships (multi-partner networks for distribution) expanded, e.g., Eli Lilly and Company grew its LillyDirect platform (I have been calling this out for a while!) Wheel and Huma launched a D2C access joint venture. 🔘Incumbents engaged disruptors to stay ahead, e.g., Lilly partnered with Ro for lower-cost GLP-1 access, Labcorp invested in Teal Health at-home cervical cancer screening 💬 This mirrors a lot of my reporting, a focus on partnerships to expand capabilities and reach and deeper integration. Expect more of this in the next quarters! 👇Link to Rock Health Report and article below #DigitalHealth #Pharma #Funding

The State of Healthtech Investment: Insights from the First 50 Days of 2025. At Nina Capital, we believe informed decisions result from rigorous research and analysis. In the first 50 days of 2025, we tracked over 160 funding round announcements across #healthcare #technology that are relevant to our own market positioning as an investment firm—a meaningful snapshot of where capital and confidence are flowing. Note that small funding rounds (Pre-Seed) tend not to be announced, with a few exceptions, and we report one below; the sample represents the market at the Seed/Series A stage and above. Total Capital Raised: - Over $5.94 billion invested, reflecting strong market momentum and investor appetite for healthcare innovation. - The median funding round size was $16.5 million. - The smallest funding round recorded was $1.0 million for a Pre-Seed round in Germany. Key Sector Insights: - AI Continues to Lead the Charge. AI-driven solutions are dominating funding rounds, with keywords like "AI tools" ($201M), "AI software" ($46.5M), and "AI-powered platform" emerging as significant focus areas. This reflects a growing reliance on artificial intelligence to enhance diagnostics, optimize operations, and personalize patient care. - Telehealth Is Evolving, Not Fading. Despite the post-pandemic shift back to in-person care, telehealth remains a major draw for investors, raising over $169M across various models and platforms. - Medical Devices & Specialized Niches Gaining Ground: Medical devices secured $192M, while niche areas like PTSD care ($29M) and fertility tech ($65M) gained notable traction. Lead Investor Highlights: - A Select Few Investors Are Dominating. The majority of funding rounds continue to have unique lead investors, but a few stood out for their repeated and significant investment activity. Elad Gil and IVP each led three rounds, contributing a combined $1.5 billion. Sequoia Capital and FJ Labs also rose from the list, leading rounds totaling $136.2M and $116M, respectively. - Concentration of Capital. A handful of leading investors are responsible for a significant share of the total capital raised, reflecting their strategic focus on scaling high-potential ventures in later-stage rounds. Insights on Diseases and Patient Populations: - Fertility Rises in Deal Volume. Fertility solutions were a hot sector, with six rounds raising $65M, highlighting innovation in reproductive health and diagnostics. - Chronic and Specialized Conditions Are Attracting Significant Capital. Diabetes-focused solutions raised the highest disease-specific funding at $120M, demonstrating a growing demand for technologies that improve chronic disease management. Cancer-related ventures continue to attract attention, securing $42.6M across rounds, a testament to ongoing innovation in oncology. Funding in excess of $50.0M indicates investor interest in neurodevelopmental and trauma-related care. #HealthTech #VC #Investments #Innovation #WeAreNina

Rock Health just dropped their Q1 2025 funding report, and there's some really good news for early-stage health tech companies. Digital health startups raised $3 billion in Q1 across 122 deals – up from $2.7 billion last year. And, early-stage companies dominated the deal count. Seed, Series A and Series B rounds made up 83% of all deals in Q1. The average deal size jumped from $15.5 million to $24.4 million. Translation? Investors are writing bigger checks when they find companies they believe in. Companies aren't waiting for stability. They're using what they call "leapfrogging" strategies: 1. 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗠&𝗔: 67% of M&A deals involved startups buying other startups. 2. 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀: Companies are skipping long healthcare sales cycles by partnering with established players. 3. 𝗔𝗜 𝗙𝗼𝗰𝘂𝘀: 40% of funding ($1.1 billion) went to AI-enabled companies. 4. 𝗢𝘂𝘁𝗰𝗼𝗺𝗲𝘀 > 𝗙𝗲𝗮𝘁𝘂𝗿𝗲𝘀: Investors want companies that can demonstrate real-world results early. The money is there. Early-stage funding is strong, but investors are more selective. You need real outcomes, a clear path to market, and the ability to move quickly when opportunities arise. https://lnkd.in/eJeg2znP

🚀 Digital health is holding steady with $6.4B invested in H1 2025 alone! 📈 Rock Health’s H1 2025 Market Overview makes one thing clear, that investors remain committed to digital health, backing 245 deals with a strong inclination toward purposeful & scalable solutions. One of the biggest takeaways? AI-enabled companies raised 62% of total digital health funding, and their average round size was 83% larger than peers. But with those dollars comes a higher bar. --- 💡 For product leaders, the signal is clear: 1. AI isn’t a strategy, but a tool. Teams must be focused on what real world problems AI is solving. Without clarity on the “why,” it’s just another buzzword. There must be crystal clarity and understanding of the real world problems. 2. Cross-functional depth and deep domain expertise is a must. Scalable and sustainable solutions demand teams that understand: •The clinical context which builds trust and relevance •The operational reality and barriers that impede scale •The business and reimbursement model in order to align with what payers and investors need to see 3. Execution matters more than ever. Companies like Hinge Health and Omada didn’t just raise capital... they turned clinical outcomes and operational discipline into value. That’s the bar! --- ✅ My final thoughts: Digital health is no longer in the “prove it” phase. With all the insights and learnings from past experiences, we're in the build it right and scale it smart phase. 🤓 This market won't just reward bold ideas. The market is looking for execution grounded in clarity, rigor, and product leaders who possess a cross-functional depth of knowledge. 💪🏼 Long-term value lies at the intersection of technology + clinical nuance + operational scalability. ♻️ #DigitalHealth #AI #ValueBasedCare #VentureCapital #HealthcareLeadership #HealthcareSaaS #NextGenRx #SmartRx