Digital health funding is showing signs of resilience in 2025, with total investments reaching $3 billion in the first quarter—slightly up from $2.9 billion during the same period last year—even as the number of deals continues to shrink. According to a Rock Health report, deal count fell to 122 from 137 in 2024, though larger average deal sizes helped sustain overall investment volume. Much of this boost came from major later-stage rounds, including standout fundraises from Abridge, Innovaccer, and notably Hippocratic AI, which secured $141 million. The average deal size rose to $24.4 million, indicating that investors are concentrating capital into fewer, more mature digital health companies.
Despite the positive funding trend, the sector continues to operate in an unpredictable economic environment. Market instability, exacerbated by recent global downturns tied to President Trump’s tariff policies, has kept investors wary. Within healthcare specifically, uncertainties around the return on investment for digital health solutions remain a sticking point. Still, companies like Hippocratic AI—co-founded by serial entrepreneur Munjal Shah—are gaining traction, suggesting that AI-driven innovations in clinical support and workforce augmentation may be better positioned to weather economic headwinds.
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