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Digital health funding falls by 33%

Erin Brodwin
Jul 8, 2022
Data: CB Insights; Chart: Thomas Oide/Axios

Global funding for the health tech sector fell again last quarter, continuing a trend that emerged at the end of last year, a new report from CB Insights finds.

Why it matters: Remember when we said health tech was in a bubble? Well, let's just say we hear popping when we peruse this chart.

Context: Unless you've been living under a rock, you know the past six months have seen a severe market correction among digital health companies, after years of over-investment and COVID-related exuberance around telehealth.

By the numbers: Digital health capital dropped 33% from Q1 22 levels and 58% from an all-time high in Q2 21, CB Insights notes.

  • Health tech companies collected $7.1 billion last quarter, the smallest amount since Q2 20.
  • The U.S. remained the leader in digital health funding, representing $4.8 billion of all funds raised, trailed by Asia with $1.1 billion and Europe with $1 billion.
  • Mega-rounds of more than $100 million accounted for $1.9 billion of funding in Q2 22, a 56% drop from Q1 22. 

Yes, but: European health tech companies saw a modest increase in capital from Q1 22.

The other side: Despite a volatile market, several U.S. digital health companies managed to reach unicorn status, and a handful of venture firms continued to pour money into startups.

  • Eight health tech unicorns emerged in Q2 22, including Oura (valued at $2.6 billion), Clarify Health (valued at $1.4 billion) and Biofourmis (valued at $1.3 billion).
  • Q2 22's top investors were Gaingels and Insight Partners, which funded nine companies each; General Catalyst, which backed seven startups; and Eight Roads Ventures, which funded six.
  • And several companies raked in large rounds, among them Biofourmis, which booked $300 million in a Series D round, and Reify Health, which pulled in $220 million in Series D funding.
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