Digital health venture capital in 2022 was the tale of two funding markets.
The first three months started out nearly as hot as 2021. From January to March, there was $6.8 billion invested into digital health companies, according to Digital Health Business & Technology’s funding and M&A database. There were 18 large funding deals valued at more than $100 million. On a near-weekly basis, companies were announcing they had achieved ‘unicorn status,’ achieving valuations estimated at more than $1 billion.
But starting in the second quarter, the market gradually fell off a cliff.
There was $4 billion invested in the second quarter and $2.9 billion in the third. The last three months of the year only saw $2.5 billion invested across 146 deals, including a large chunk of it coming from a single deal,a $330 million round for DispatchHealth. While the total for 2022 was the second-best year since Digital Health Business & Technology started tracking this data in 2010, the fourth quarter was the lowest quarterly funding total since 2019.
In total, there was approximately $16.4 billion invested in digital health in 2022, a sharp decrease from $30.2 billion the prior year but up from $14.8 billion in 2020.