Financing in Digital Health: An Overview

Digital health is an industry in the life sciences experiencing constant innovation as well as attention from both investors and fellow companies. The Biotechgate Business Development Database contains an array of up-to-date information on digital health. In this article, you’ll find an overview of how funding in the industry has developed and further analysis of the recent downtrend in investment.

Review of 2022

Funding in 2022 for digital health companies had some erratic moments but overall retained rather consistent levels, safe for drops in September and October. April proved to be the most popular month, buoyed by a greater number of financing rounds taking place.

The largest round of the year came in March, with French telehealth platform Doctolib receiving USD 500 million as part of their Series F fundraising.

Total financing from 2013 to 2022

As shown in the below chart, starting from 2013, the total amount invested in digital health companies experienced a steady rate of growth. Like other life science industries, the digital health field also enjoyed the benefits of the 2020-induced bull run, climbing to over USD 15 billion before almost doubling in 2021 USD 28 billion. This was partially due to the successful IPO of Agilon Health, which raised over USD 11 billion during its floatation on the New York Stock Exchange.

2022 saw this bull run abruptly coming to a halt due to various macroeconomic concerns affecting many sectors, with funding being retracted and total investment crashing down by 67% – albeit still above pre-pandemic levels.

According to Biotechgate data, the vast majority of financing in this period came from private equity sources, at 75%, with companies going public only accounting for just over 1%. As shown below, in terms of the locations of companies receiving funding, 64% belonged to US-based organizations, with the next closest country being the United Kingdom at 5% – highlighting the gap between the USA and other countries with respect to digital health investment activity and attention.

2023: The story so far

Like other industries in the life sciences sector, digital health has also fallen victim to the cooling in funding in 2023. While total financing so far has proven to be less than the same point in 2022, there has still been activity surrounding the industry, although with less funding being on offer.

After a peak in January, total investment halved the next month with a further reduction in March. Despite this, June, July and August have been the subject of gradual increases. At the time of writing, the largest round in 2023 belonged to Monogram Health, a tech-enabled in-home kidney disease management company, which raised USD 375 million thanks to investors including CVS Health.

To date, the digital health industry has been marked by exponential growth, particularly in 2020 and 2021. While the last two years have seen a downturn, innovation is still rife and the field is continuing to adapt and evolve worldwide.