Venture capitalists during the pandemic pumped billions of dollars into startups applying digital technologies to healthcare. Making a return on those investments has proven difficult.
Interest in sectors such as telemedicine propelled record venture investment in U.S. digital-health startups, which raised $29.2 billion in 2021, according to Rock Health, an investor in the sector.
Funding slipped the next two years as acquisitions declined and interest rates rose. In 2023, venture firms put $10.7 billion into digital health, Rock Health said.
This year, investment is rebounding as artificial intelligence draws investors to the industry. The $5.7 billion that digital-health startups raised in the first half puts this year on track to top last year’s total and the $8.2 billion collected in 2019, Rock Health said.