CB Insights – State of Digital Health, 2023

Global digital health funding and deals experienced a significant decline in 2023, reaching their lowest levels since 2016 and 2014, respectively. Only $13.2 billion was raised across 1,397 deals, representing a halving of funding and a more than one-third drop in deals. Despite the downturn, the United States remained the leader in digital health, attracting over half of all deals. The median deal size remained at $4 million, the highest on record, although venture deal sizes in general have decreased since 2021. Mega-rounds, deals worth $100 million or more, have virtually disappeared from the digital health sector, with only three such deals in Q4'23 and a total of 20 for the entire year. The number of digital health unicorns, private companies with valuations exceeding $1 billion, decreased from 97 to 94 due to a combination of startup exits, down rounds, and shutdowns. Digital health mergers and acquisitions nearly doubled in Q4'23, indicating a pick-up in market consolidation. With limited funding options and a frozen IPO market, cash-strapped digital health startups may increasingly turn to M&A as a solution. The report also highlights changes in the top investors in the digital health sector and the leading sectors for funding. Overall, the digital health landscape is expected to continue experiencing consolidation in 2024, particularly in sectors that have seen funding drops and the downfall of major players.