The digital health market, specifically the consumer-oriented health sector, has shown signs of stabilization after a period of rapid growth. Quarterly deal values have consistently been around $1.5 billion since late 2022. This stability is largely due to the dominance of the telehealth segment, which offers virtual platforms for primary care.
Notable funding rounds include Talkiatry, a digital psychiatry service that received $130 million from Andreessen Horowitz, and Grow Therapy, an online teletherapy platform that raised $75 million in a Series B round led by TCV.
As the market matures, there is a new wave of startups utilizing generative AI to enhance patient care. This is particularly evident in the digital care and treatments segment, where companies are using advanced technologies to provide tools for patient treatment, recovery, and intervention. Venture capital investment in this segment has consistently grown over the past four quarters, indicating a strong interest in digital health solutions.
In Q2 2024, investment in the digital care and treatments segment reached $272.3 million, an increase from the previous quarter. This upward trend reflects growing confidence among investors in the capabilities of digital health technologies. Significant funding rounds in June included Foodsmart, a digital platform focused on nutrition counseling and healthy eating plans, which raised $200 million led by TPG and its Rise Fund. Additionally, Sword Health, an AI-driven physical therapy platform, secured $130 million from investors such as Khosla Ventures.
The digital care and treatments market is divided into six categories, each addressing specific health needs:
This segmentation highlights the diverse applications of digital health technologies and their potential to transform patient care across various domains.
Exit strategies within the digital health sector have been relatively quiet, with few significant exits in recent months. However, there are indications that the initial public offering (IPO) window may be reopening, particularly within the digital care and treatments segment. Reports suggest that Omada Health, a diabetes digital care startup, has filed an S-1 with plans to go public in 2025. Similarly, Hinge Health, an online physical therapy startup, is also preparing for an IPO in the same timeframe. These developments could signal a renewed interest in public market opportunities for digital health companies, potentially leading to further growth and innovation in the sector.
As the digital health market continues to evolve, the integration of advanced technologies and the emergence of new startups will play a crucial role in shaping the future of patient care. The ongoing investment trends and potential IPOs reflect a dynamic landscape that is poised for further transformation, driven by the need for innovative solutions in healthcare delivery.