3 statistics that show how quickly one of the hottest areas of healthcare plunged into a downturn
Andry Djumantara/Getty Images
- Digital-health startups saw a big downturn in 2022, as funding decreased by 57% compared to 2021.
- Telehealth funding in particular tumbled by $10 billion.
- No billion-dollar companies were created in the last quarter of 2022.
In 2022, digital health came down from its record high — and, as a new report illustrates, it hit the ground hard.
Funding for digital-health startups slumped to $25.9 billion in 2022, a 57% decrease from 2021's record, an end-of-year report from CB Insights found.
Digital-health funding surged amid the coronavirus pandemic, fueled by easy access to funds and investor optimism for how technology could reshape healthcare. That optimism has cooled as pandemic-driven gains in technologies like telehealth have faded, and as higher interest rates reduced the availability of funds.
Funding fell in every quarter last year, reaching $3.4 billion in the final three months of the year. That figure was the lowest in five years of data collected by CB Insights. For telehealth specifically, the report says that there was a $10 billion decrease in funding compared to 2021.
Amid the slump, it became harder for startups to boost their valuations, and in the last quarter of 2022, there were no new billion-dollar companies created. Still, the report says that 2022 was the second-best year for the creation of new unicorns overall, with 2021 as the highest.
Despite the dour-looking picture, some companies have still been able to raise funds. And there could be an upside to the slowdown: At November's HLTH conference, some experts said that the companies that manage to close deals in this environment will be the ones that have proven business models and will be more likely to deliver on what they promise.