The
digital
health
world
showed
real
signs
of
market
traction
during
the
first
half
of
this
year,
with
startups
in
the
space
raising
$6.4
billion
in
venture
capital
funding,
according
to
a
report
released
by
Rock
Health
on
Monday.
Digital
health
startups’
funding
total
during
the
first
half
of
2025
is
slightly
more
than
the
$6.2
billion
and
$6
billion
that
these
startups
raised
in
the
first
halves
of
2023
and
2024,
respectively.
This
signals
a
steady
market
that
has
figured
out
what
its
new
normal
looks
like
following
a
pandemic-era
boom,
the
report
noted.
AI-focused
startups
captured
62%
of
all
digital
health
venture
funding
in
the
first
half
of
the
year,
raising
an
average
of
$34.4
million
per
round
—
which
is
an
83%
premium
over
these
startups’
non-AI
peers,
the
report
said.
Most
of
these
AI-first
companies
made
products
to
improve
clinical
workflows,
nonclinical
administrative
tasks
and
data
infrastructure.
Of
the
11
megadeals
—
fundraises
totaling
$100
million
or
more
—
that
were
closed
by
digital
health
startups
during
the
first
half
of
2025,
nine
were
raised
by
AI-focused
companies.
For
instance,
clinical
documentation
startup
Abridge
raised
$250
million
in
February
and
another
$300
million
in
June.
Other
AI
startups
including
Innovaccer,
Hippocratic
AI,
Qventus
and
Truveta
all
closed
rounds
larger
than
$100
million.
The
report
noted
that
providers
are
rapidly
adopting
some
of
these
tools,
too.
For
AI
tools
that
tackle
things
like
ambient
documentation
and
medical
reference
platforms,
some
hospitals
are
reporting
usage
rates
as
high
as
90%,
which
is
a
striking
shift
given
providers’
past
resistance
to
new
tech,
the
report
stated.
It
also
said
that
AI
startups
are
earning
providers’
trust
by
delivering
products
that
are
more
intuitive,
implementing
tools
more
seamlessly
into
the
existing
tech
infrastructure
and
generating
measurable
outcomes.
In
addition
to
the
billions
flowing
to
AI
vendors,
the
first
half
of
2025
also
featured
the
long-awaited
IPOs
of
Hinge
Health
and
Omada
Health
—
two
exits
that
many
felt
were
overdue,
following
years
of
stagnation.
The
report
pointed
out
that
these
companies
spent
over
a
decade
building
trust,
refining
their
care
models
and
deploying
AI
to
deliver
scalable
care.
The
public
debuts
of
Hinge
and
Omada
could
mark
the
beginning
of
a
more
mature
digital
health
market,
which
may
help
reignite
investor
confidence,
as
well
as
set
the
stage
for
future
exits
and
healthier
investment
cycles.
While
public
offerings
draw
headlines,
the
report
noted
that
most
digital
health
startups
are
exiting
through
M&A,
with
107
such
deals
in
the
first
half
of
2025
—
which
puts
the
year
on
pace
to
nearly
double
2024’s
total.
Private
equity
firms
are
also
fueling
consolidation
by
combining
legacy
healthcare
businesses
with
AI-native
startups.
They’re
betting
that
these
roll-ups
will
enable
greater
efficiency
and
scale,
according
to
the
report.
Amid
the
promising
exit
environment
and
increasingly
fast
pace
of
AI
adoption,
digital
health
companies
also
face
growing
policy
and
economic
uncertainty,
particularly
regarding
the
recent
passage
of
the
One
Big
Beautiful
Bill
Act.
The
bill’s
Medicaid
work
requirements
and
changes
to
ACA
marketplaces
could
leave
millions
of
people
uninsured,
shrinking
the
addressable
market
and
exacerbating
providers’
financial
strain.
To
navigate
these
shifts,
Rock
Health
encouraged
digital
health
startups
to
engage
early
with
federal
initiatives
and
try
to
align
with
priorities
like
chronic
disease
and
AI
in
care
delivery.
Photo:
Ta
Nu,
Getty
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