The data: Digital health funding reached $6 billion across 183 deals during Q1’22. This lagged behind Q4’21 ($7.3B), according to a new report by Rock Health.
Digging deeper into the data: Digital health startups specializing in tech that reduces clinical admin burden increased in Q1. We think this was in direct response to healthcare’s Great Resignation.
AI for healthcare administration startups moved up to the third-highest funded area compared with the 11th place in Q4’21, raking in $888 million. This category included startups like medical transcription company DeepScribe.
Physician burnout and nursing shortages are likely drivers behind the jump in AI admin funding.
A prediction we got right: Last year, we predicted we’d see a rise in funding for AI admin startups.
We pegged companies that speed up prior authorizations as hot funding recipients, in particular.
What’s next? The digital health funding boom in 2020-2021 is starting to slow down. But we suspect investors will continue to place bets on high ROI areas like fertility.
Geopolitical tensions, inflation, and fewer SPAC deals could all be contributing factors to less funding in Q1. Still, the $6 billion earned in Q1 is far higher than average digital health funding earned in any quarter before the pandemic.
One area investors will likely move toward is fertility.
We suspect startups that can personalize fertility will climb higher on the top-funded list.