Q1 2021 Funding Report: Digital health is all grown up

"Q1 2021 closed with $6.7B in US digital health funding, the most-funded quarter to date. Average deal size ballooned to $45.9M (up from $31.7M in 2020), and SPACs continued to offer a new path to liquidity, with 10 announced or closed SPAC deals. With growing deal sizes, a faster funding pace, and new exit pathways, we’re in a period of heightened opportunity.
Ten years ago, we at Rock Health published our first report on digital health venture investment, highlighting an annual haul of $1.1B from investors into the emerging sector. In each of the last two weeks of March 2021, investments in digital health topped $1B+.1 And with $6.7B invested across Q1 2021, the largest quarter of funding ever, the digital health sector is on track to significantly outpace 2020’s $14B+.
In other words: We’re all grown up.
The pandemic prompted an acceleration in the adoption and mainstreaming of digital health. The surge in venture funding over the past twelve months likely reflects investors’ appraisal of the opportunity this acceleration creates. And it parallels some of the rapidly-maturing fundamentals of the sector in terms of consumer adoption, clinical impact, and of course, digital health’s role in responding to the pandemic. Over the past decade, private digital health companies have also captured a larger share of overall venture capital dollars, moving from just 2% of all venture investment in 2011 to 9% in 2020.
Digital health is in a pivotal moment. Innovators, investors, and buyers are rightfully exuberant for digital health to transform discovery, care delivery, and well-being. But adults still have to wear their seatbelts—especially on fast rides..." Lire la suite