Podnosis The state of digital health investment in 2024
Jul 10, 2024
Digital health funding is in a slump, with the first quarter seeing its lowest investment totals since 2019. Startups must navigate a shift towards cautious deal-making, blending technology with services for growth. AI investments are on the rise, alongside a focus on mental and women's health. Health systems demand measurable outcomes and compelling evidence, emphasizing value-based care. Recent delistings have prompted companies to restructure while remaining flexible to seize new opportunities in community health.
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Shifting Funding Landscape
- Digital health funding is down, but the number of deals is up, leading to smaller check sizes.
- This shift indicates a move away from "growth at all costs" to a focus on profitability.
Bridge Rounds and Market Correction
- Many startups are raising unlabeled bridge rounds to extend their runway and improve metrics before seeking larger rounds.
- This suggests a market correction where companies must demonstrate stronger performance before securing further investment.
Investor Dilemma
- Investors face a dilemma, wanting high valuations for their portfolio but also acting conservatively in new deals.
- This tension highlights the current market uncertainty and cautious approach to new investments.