Global healthtech funding experienced a decline, reaching $3.4 billion in Q2, marking the sixth consecutive quarter of reduced funding for the segment. This figure represents the lowest amount raised in a quarter since Q3 of 2017, indicating a prolonged downward trend in healthtech funding.
Despite the overall funding decline, CB Insights found that certain healthtech startups with substantial growth potential received support from investors. Notably, Q2 of 2023 witnessed an increase in early-stage median deal sizes and mega-round deals, showcasing promising signs amidst the funding dip.
The digital health segment secured $3.4 billion in Q2, which was $100 million less than the funding registered in Q1 ($3.5 billion). Other sectors also experienced funding drops, with retail tech facing a 24% quarter-on-quarter (QoQ) decrease and fintech encountering a 48% QoQ decrease.
The number of deals in the digital health space declined by 115 deals, reflecting a 25% decrease QoQ. The study revealed that businesses in care delivery and navigation tech closed the most deals in Q2, with 152 deals worth $1.5 billion, accounting for 44% of digital health’s entire deal volume in the quarter.
The monitoring, imaging, and diagnostics segment followed in second place, securing 77 deals worth $700 million. Health insurance and RCM tech took the third spot with 13 deals, raising $400 million.
The largest digital health deal in Q2 came from the health insurance and RCM tech niche, as Aledade, the biggest network of independent primary care practices in the US, raised $250 million in a Series F round.
In addition, the Health data and analytics segment secured $300 million from 30 deals, while Drug R&D tech, digital therapeutics, and digital pharmacy tech closed 25 ($200 million), 48 ($200 million), and 3 deals ($22 million) respectively.
Out of the $3.4 billion generated in Q2, five companies accounted for 26% of digital health’s funding for the quarter. These companies were Aledade ($260 million), Heartflow ($215 million), Strive Health ($166 million), Saluda Medical ($150 million), and Author Health ($115 million).
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