Infographic – Q3 Digital Health Venture Funds Slide

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

22 Oct. 2022. Venture funding for start-ups worldwide applying digital technologies to health care continued to fall in the third quarter of 2022, both in deals and dollars invested. Technology industry research company CB Insights reported the data earlier this month in its quarterly report on venture capital financing (registration required).

CB Insights defines digital health companies as businesses developing health-related solutions with digital technology and software such as telehealth, digital therapies, mental health technologies, clinical trial data collection, and diagnostics, as well as more mature health IT applications. From July through September 2022, total venture funding worldwide in digital health start-ups fell to $5 billion, from $7.2 billion in the second quarter. That quarterly total is the lowest amount of funding for these companies since early 2020, and less than half of the $10.5 billion raised in just the first quarter of 2022.

The number of digital health venture deals worldwide also dropped sharply, from 720 in the first quarter of 2022 to 419 in Q3, continuing a decline each quarter since mid-2021. Funding for U.S. digital health start-ups accounted for more than half (58%) of funds raised and number of deals (55%) worldwide, with Asian businesses gaining 26 percent of funds raised and 22 percent of deals in Q3.

The average deal size worldwide for digital health start-ups so far in 2022 is $16 million, down from $25 million in 2021, but similar to 2020. However, the median deal size, the half-way point from largest to smallest deals, in 2022 is $4 million, the same as 2021 and an increase from 2020. In addition, early-stage venture deals — seed and first venture rounds, those reported on frequently in Science & Enterprise — account for 60 percent of digital health venture transactions so far this year, comparable to 2021 and 2020.

More from Science & Enterprise:

• Infographic – US Biotech Venture Funds Fall in Q3
• Infographic – Sharp Drop in Q3 Venture Funds
• Infographic – Biotech Index Q3 Rollercoaster

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