As we kick off 2025, it's worth reflecting on the forces that shaped digital health in 2024. From early-stage innovation capturing investor attention to mega funds like a16z and General Catalyst driving dealmaking, the year highlighted a "David and Goliath" dynamic in healthcare. Despite a challenging funding environment, startups continue to navigate opportunities amidst Big Tech’s influence and AI’s transformative potential. For a 2024 year-end market overview, check out Rock Health's latest report.
Increasing early-stage fundraising activity, alongside smaller late-stage deals drove 2024’s total funding numbers downward—a dynamic that gives us important intel as we head into 2025. New startups are attracting investor attention despite a more tempered funding environment; yet, their growth trajectories will depend on how effectively they navigate a Goliath-rich environment. Later-stage startups struggling with downward valuation pressures or stalled fundraising rounds could fold or seek acquisition in the coming year—potentially restarting digital health M&A activity, which hit a decade low in 2024 at 118 deals.
