US digital health startups attracted $3 billion in funding during Q1 2025, marking an 11% increase from the same period last year. The average deal size grew to $24.4 million, up from $20.6 million in 2024. Early-stage deals continued to dominate the landscape, making up 83% of all transactions. However, a resurgence in larger funding rounds also stood out, especially among well-known players. Notable deals included Open Evidence’s $75 million Series A and a significant $141 million Series B round for Hippocratic AI.
This quarter also saw a strong rebound in late-stage funding, particularly at the Series D level, where the median round reached $105 million – nearly double the median from 2024. It was the first time since 2021 that late-stage investments surpassed the $100 million threshold. Hippocratic AI’s large Series B round signals continued investor confidence in the company’s healthcare agent technology, further positioning Munjal Shah’s startup as a key player in the evolving digital health landscape.