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Infographic – Digital Health Keeps Clicking in 2022

Digital health venture funding

Click on image for full-size view (CB Insights)

23 July 2022. While venture capital funding for digital health start-ups worldwide is down compared to last year, the pace so far in 2022 remains on an historically strong track. Technology market research company CB Insights reported the data this week as part of its report on digital health in the second quarter of the year (registration required).

CB Insights defines digital health companies as those providing IT services to health care enterprises, as well as digital therapeutics, telehealth, and technology applied to mental health and clinical trials. Digital health start-ups raised $7.1 billion in 554 deals globally from April through June 2022, down from $10.5 billion gained in 701 deals in the first quarter. Combining the first two quarters shows digital health companies raised $17.6 billion in 1,255 deals so far in 2022.

If venture transactions continue at this pace, the digital health sector is expected to attract $35.3 billion in investments, in 2,510 deals. Those annual totals are well behind than the $59.3 billion raised in 3,107 deals during 2021, but still reasonably healthy in historic terms. In 2020, for example, digital health start-ups raised $32.6 billion in 2,564 deals. If the 2022 pace keeps up, venture investment dollars should exceed the 2020 total and almost match the number of deals that year.

Also in the second quarter this year, U.S. digital health companies attracted about half of the total venture dollars raised (51%) with Asian start-ups raising about a quarter (23%) and European companies about one-fifth (19%), all in line with historical averages. Average deal size in this sector declined from $25 million in 2021 to $17 million so far this year, although the median deal size of $5 million — half-way through the rank order of deals — remains the same as last year. And early-stage venture deals in digital health, defined by CB Insights as seed and series A venture rounds, make up six in 10 of all venture deals in this sector, also in line with recent history.

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