October 3, 2023- Contributing factors to lower levels of funding in Q3 2023 are varied and intertwined– including a slower economy, the arrival of high interest rates which impact venture funds’ ability to raise capital, reduced funding for startup investment, and an overall more conservative mindset among investors.
These funding dynamics make the startup fundraising environment difficult to navigate. In Q3 2023, U.S. digital health startups has the lowest quarter by funding total since Q4 2019. Digital health startups raised 2.5B across 119 deals, brining 2023’s totals to date to 8.6B raised across 365 deals.
Despite a lower deal count during 2023 so far, patterns have emerged among digital health investments. Funding has shifted from a pandemic-era focus toward digital health products and services that support disease treatment, nonclinical workflows, and the management of complex conditions.