State of Digital Health Q2’23 Report

State ofDigital Health Global | Q2 2023 Global data and analysis on dealmaking, funding,and exits by private market digital health companies Guess Less.Win More. CB Insights helps the world’s leadingcompanies make smarter technologydecisions with data, not opinion. Our Technology Insights Platform providescompanies with comprehensive data, expertinsights, and work management tools thatenable them to discover, understand, andmake technology decisions. ▮▮▮▮IIISign up for a free trialSign up for a free trial Platform Connect Get introductions to the right technologyproducts, services, and partners withone click. No research. No hassle. Make your brand moresearchable. Findable.Buyable.Partnerable.Investable. Complete a free Analyst Briefing Survey*and get in front of enterprise tech buyers,M&A teams, and investors. *Survey takers have increased their lead generation 3x on average. ▮▮▮▮▮IIIApply hereSign up for a free trial We get a perspective on healthcare techthatwe can’t get anywhere elsewithCB Insights research. Anne WellingtonFormer Managing Director, Cedars-Sinai Accelerator Dig Deeper. CB Insights clients can find and trackcompanies using our analyst-curatedExpert Collections. Digital Health In this report, we analyzed more than 10K global digital health vendors.Our analysis includes companies developing software, platforms, sensorand robotic hardware, health data infrastructure, and tech-enabledservices in healthcare. We exclude pureplay pharma/biopharma,sequencing instruments, gene editing, and assistive tech. Earlier this year we revised the Digital Health Expert Collection, aligningacrossseven categoriesto reflect changes in the healthcare technologylandscape, including the impact of emerging markets and technologies.Consequently, the data in this report, including historical funding and dealcounts, may appear slightly different than data from prior reports. If youhave any questions about this report's methodology, pleaseclick heretolearn more. State of Digital Health Y Combinator’s healthcareinvestment strategy prioritizesdrug R&D, care delivery, andinsurance Analyzing Mayo Clinic’s growthstrategy: How the healthsystem is building the hospitalof the future Our Most PopularResearch onDigital Health The ‘payvider’ health insuranceexperiment is on the ropes The digital therapeutics &wellness tech market in 6charts CVS is betting big on primarycare. Here’s a breakdown of its5 biggest deals of 2023 Andreessen Horowitz is pullingback on digital health, but caredelivery and wellness techremain priorities The healthcare revenue cyclemarket in 5 charts AI drug discovery & designstartups have raised $10Bsince 2019 7 applications of generative AIin healthcare TLDRState of Digital Health Your rundown ondigital healthin Q2’23 $2.2B $3.4B $2.7M 348 5$100M+mega-rounds. Global digital healthfunding. Digital health deals. US digital healthfunding. Median early-stagedeal size. Digital health dealsdropped 25% QoQ, from463 in Q1’23 to 348 inQ2’23. This brought dealcountto its lowest levelsince Q2’15, 8 years ago. Digital health fundingticked down just 3% QoQ,from $3.5B in Q1’23 to$3.4B in Q2’23. Thedecline was less severethan the broader venturemarket, which saw fundingfall 13% QoQ. Early-stage deals in digitalhealth are getting bigger,with the medianround sizegrowing4% from $2.6M infull-year 2022 to $2.7M in2023 YTD. This follows asimilar pattern acrossventure as a whole. Mega-round deals andfundingincreased for thefirst time since Q4’21. Thequarter saw $906M indigital health mega-roundfunding across 5 deals,with the largest going toAledade($260M) andHeartFlow($215M). US digital health fundingfell to its lowest level sinceQ3’17, dropping 8%QoQfrom $2.4B in Q1’23. US-based digital healthstartups continued tocommandthe majority offunding, whileAsia-andEurope-based digitalhealth startups saw just$0.7B in combinedfunding. The top investors in Q2’23—Andreesen Horowitz,Flare Capital Partners, FristCressey Ventures, andSOSV—each invested in 4digital health companies. On the other hand, mediansizes for mid-and late-stage digital health dealshave fallen in 2023 YTD, ashavedeal sizes across allinvestor groups. Although digital healthfunding has remainedrelatively flat over the last3 quarters, Q2’23 still sawfunding reach its lowestlevel since Q3’17. Mega-rounds accountedfor 26% of digital healthfunding—a jump of 9percentage pointsQoQandthe highestsince Q2’22. See the data→ See the data→ See the data→ See the data→ See the data→ ContentsState of Digital Health Investment Trends11Unicorns35Exit Trends39Investors44 Geographic Trends48 US49Silicon Valley55New York59Asia63Japan69Europe73United Kingdom79 Global Trends Investment Trends State of Digital Health|Global Trends|Investment Trends Digital health funding reaches $6.9B in H1’23,only28% of last year’s total State of Digital Health|Global Trends|Investment Trends Digital health funding lowest since Q3’17, deals