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Health care funding drops 33% in first half of the year

Illustration of a knife with a red cross handled in a stack of money

Illustration: Sarah Grillo/Axios

Health care funding was down 33% in 1H23 compared with the same time last year, according to a report from Digital Health New York.

Why it matters: Investment in Q2 of this year was on track with the fourth quarter of 2022 — indicating a sliver of hope for the second half of 2023.

By the numbers: Q1 saw $1 billion of funding across 29 deals, while Q2 saw $600 million of funding across 34 deals.

  • In the first quarter, 62% of the funding was across early-stage deals (pre-seed, seed and Series A), with 38% across late-stage deals.
  • In Q2, there was a more even split, with early-stage deals accounting for 54% of the funding and late-stage deals accounting for 46%.
  • Provider enablement took 23% of funding in Q1 and 24% in Q2.
  • Women's health brought in 13% of funding in Q1 and 18% in Q2.

What they're saying: "The market is tough and unpredictable. Glitzy 40-slide decks won’t cut it, with practically everyone stretched to capacity," said Lindsay Jurist-Rosner, CEO of caregiving startup Wellthy.

  • "Instead, two key factors feel more important than ever in 2023: a clear, concise narrative about impact — think head-turning ROI — and exceptional and authentic relationship-building," Jurist-Rosner says.
  • "Capital preservation amidst a continued focus on scale will separate the top-tier companies from the rest," says Matt Griffiths, the East Coast director health tech and medical devices at HSBC.
  • "Those without runway through 2023 will be at risk for acquisition or down rounds, especially if fundamentals aren’t strong," he continues.
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