Digital Health Funding Continues Downward Trend

Adjusting to the new normal, digital health funding is getting harder to come by. 

Follow the money. After rising steadily for years, fewer deals and smaller check sizes defined the first half of 2023, per Rock Health

  • Digital health startups raised $6.1B in H1 2023. 
  • There were 244 deals closed during the period.
  • The average funding round reached $24.8M.

Highs and lows. Trending in the wrong direction, H1 2023 represents a significant decline from $10.3B over the same period last year and $14.7B during H1 2021. 

Signaling more challenges ahead, Q2 2023 contracted even more than Q1. At this pace, the category could see its lowest annual totals since 2019. 

Special ops. A smaller pool of investors did digital health deals, with repeat backers returning to the space as generalists shied away. 

Continuing a trend from Q1, investors are backing familiar teams and more-established companies — 12 megadeals (rounds of $100M+) accounted for 37% of this year’s funding.

Deal making. With limited options, founders are taking cash however they can get it — 41% of H1 2023 deals weren’t classified as a particular round or series. 

Meanwhile, those unable to secure capital are fielding acquisition offers or are being forced to close up shop. 

Looking ahead: As we pointed out in Issue No. 227, health and fitness startups are confronting a higher bar for winning over investors and customers alike:

“Driving business returns and health outcomes will replace growth at all costs as the new measures of success.” 

Facing this reality, the sector will endure more hardship as expectations are reset and a more sustainable path forward takes shape. 


Get the latest health and fitness industry news

Keep up with industry news, trends, investment activity, and job openings — in one weekly newsletter.

    No thanks.