US digital health funding hit $8.1bn in 2018

Funding in digital health companies in 2018 smashed the previous record-holding year of 2017 and now accounts for almost 10% of all US venture funding


In 2018, digital health funding soared to $8.1bn in the US, smashing the previous record-holding year of 2017 which saw investment reach 5.7bn, with funding up 40%, according to a report from San Francisco-based health tech funder Rock Health. This means that digital health funding now accounts for almost 10% of all US venture funding, up from 7.5% from 2017, a trend that highlights the growing investor confidence in the sector as the market matures.

The report, "2018 Year End Funding Report: Is digital health in a bubble?"also found that funding rounds are larger across every stage, with the average digital health deal size climbing 38% to close to $22m dollars. This meant that even though the number of deals in 2018 were roughly the same as in 2017, 368 and 360 respectively, funding overall was significantly higher.

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Despite the maturation of the market, Rock Health concluded that there is still opportunity for early-stage startups to succeed, since half of all digital health funding deals were in seed or Series A rounds.

Rock Health researchers Sean Day and Megan Zweig noted in the report: "2018 was an entrepreneurs' market. With capital readily available, young companies are raising larger rounds than ever before, more frequently than ever before."

The digital health market has achieved mainstream appeal in recent years with the popularity of health wearables such as Fitbits and the Apple Watch.

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