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By Staff Reporters
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The “new normal” is characterized by fewer deals, smaller deal sizes, and fewer investors, Rock Health found in a recent study. And if funding in the second half of the year continues at its current pace, 2023 will be the lowest digital health funding year since 2019, according to the report, authored primarily by research associates Mihir Somaiya and Madelyn Knowles. For example, in the first half of 2023:
- Digital health startups raised $6.1 billion in 244 deals. The average deal size was $24.8 million.
- In Q1, startups raised $3.5 billion in 131 deals, and $2.5 billion over 113 deals in Q2.
- 555 investors were involved in fund raises, compared to 775 in the first half of 2022 and 832 in the first half of 2021. Of those investors, 71% had previously invested in digital health.
- There were roughly 12 digital health startup acquisitions per month, compared to 15 monthly in 2022 and 14 each month for the past five years.
The lack of dollars flowing to companies is already reverberating: Some startups are closing down. Pear Therapeutics filed for bankruptcy in April and sold its assets to four buyers in May. Other digital health startups—SimpleHealth, The Pill Club, Hurdle, and Quil Health—also closed in the first half of 2023.
RELATED: https://medicalexecutivepost.com/2023/08/04/venture-capital-rising-for-womens-health-start-ups/
Assessment: There may be fewer investors overall, but those still investing in digital health are putting a lot of money down, according to Rock Health.
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Filed under: "Advisors Only", "Doctors Only", Experts Invited, Information Technology, Investing | Tagged: Digital Health, digital health start-ups, Hurdle, Madelyn Knowles, Mihir Somaiya, Pill Club, Quil Health, rock health, Simole Health, start-ups |
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