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Digital health funding in Q1 ticks up

A computer keyboard and mouse attached to a medical case.

Illustration: Megan Robinson/Axios

Digital health fundraising ticked upward in the first quarter, with $1 billion raised, per a report from Digital Health New York.

Why it matters: The numbers offer a surprising bright spot amid macroeconomic challenges and the collapse of Silicon Valley Bank.

By the numbers: Per the report, 29 companies raised $1 billion in Q1 2023.

  • That's 60% higher than Q4 of last year, which saw about $620 million raised, and on par with the second quarter of 2022, which saw $1.1 billion raised.
  • Late-stage funding (defined as Series B and beyond) comprised 38%, while early-stage (pre-seed, seed and Series A) made up the vast majority at 62%.

Also: Pharmaceutical tech took almost a quarter of that funding, closely followed by provider enablement technology.

  • Women's health tech took about 13%.

Zoom in: Clinical trial transformation was the big winner, with clinical trial recruitment company Paradigm taking home $203 million, followed by fertility, with fertility benefits manager Kindbody raising $100 million.

  • Meanwhile, biotech company Paratus Sciences raised $100 million, while and value-based care enablers Vytalize Health and Pearl Health raised $100 million and $75 million, respectively.
  • These five companies made up 53% of total funding this quarter.

What they're saying: "Innovators are shifting their attention from focusing primarily on growth to also finding ways to bridge longer funding cycles," says Deloitte health tech leader Peter Micca in the report.

  • "However, 2022 investments were still approximately 30 percent higher than 2020, and more than doubled from 2019," he continues.
  • "With rising medical costs and demographics shifting toward more Medicare enrollment, we are at an inflection point for healthcare sustainability and access," says Michael Kopko, CEO of Pearl Health.
  • "Primary care is under-appreciated and underresourced in the US," he says. "We have an opportunity to contribute to a primary care renaissance through new value-based payment models and innovative technology.
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