Healthcare innovation, digital well being rake in huge funding {dollars} in Q3

Now that the third quarter of 2021 has ended and the enterprise studies are coming in, one factor is for certain: Buyers are persevering with to guess huge on healthcare innovation.

In truth, traders have poured extra into healthcare this yr – $97.1 billion – than every other trade, in keeping with CB Insights’ State of Enterprise Q3’21 Report. It has collected 22% of the overall quantity raised thus far in 2021.

For Q3 alone, healthcare raked in $30.5 billion, which is a slight lower from the $33.9 billion raised in Q2 this yr, in keeping with the CB Insights report. Nonetheless, this quarter’s funding was greater than every other quarter previous to this yr.

Regardless of the dip within the quantity raised, healthcare accomplished essentially the most funding rounds this quarter up to now. The trade closed 1,901 offers in Q3, up from 1,649 final quarter.

The CB Insights report additionally famous that there have already been extra healthcare mergers and acquisitions this yr than all of 2020 (1,822 in comparison with 1,713).

Whereas the CB Insights report took a take a look at the total scope of healthcare, Rock Well being revealed its quarterly evaluation of digital well being.


The report highlights that 2021 digital well being funding has already reached $21.3 billion throughout 541 offers, with a median deal dimension of $39.4 million.

In Q3 alone, digital well being scored $6.7 billion throughout 169 offers, in keeping with Rock Well being. This quarter skilled a dip, in comparison with Q2’s record-breaking $8.2 billion in funding throughout 223 offers.

The report says the decline may be attributed to fewer offers accomplished in addition to fewer mega offers (rounds value $100 million or extra). The earlier two quarters had 22 and 25 respective mega offers in comparison with simply 15 in Q3.

Throughout the board, digital well being deal sizes thus far this yr are the most important they’ve ever been, in keeping with the report. Common funding has greater than doubled since 2017 for Collection A, B and C+ rounds in 2021.

“To place this in perspective, this yr’s common digital well being firm’s Collection A elevate ($18M) exceeds the common Collection B elevate in 2017 ($17M),” the authors mentioned within the report. “In different phrases, A is the brand new B.”

As for the place traders are placing their cash, some issues remained the identical in Q3 2021, however there are additionally some rising tendencies, in keeping with Rock Well being.

Digital well being firms that have been centered on analysis and improvement, on-demand healthcare or illness therapy continued to steer the listing of top-funded worth propositions. Equally, psychological well being continued to be the main clinical-indication space for investor {dollars}, racking up $3.1 billion thus far in 2021.

In the meantime, femtech is lastly getting extra investor consideration. Final quarter was the second-highest-funded quarter for girls’s well being ever, with $443 million raised, following Q1 2021’s $631 million, in keeping with Rock Well being.

Ladies-led firms have additionally gotten a lift this yr as they closed 19% of 2021’s digital well being offers via Q3, the very best proportion ever recorded by Rock Well being. Nonetheless, nonetheless, women-led firms proceed to lag behind these led by males.

“Regardless of elevating 19% of rounds, women-led firms accounted for simply 14% of 2021’s digital well being whole funding pot up to now, with a $29M common examine dimension for women-led rounds, in comparison with $42M for men-led rounds,” the authors mentioned.

Digital well being firms centered on fairness have additionally gained momentum not too long ago, spurred by the disparities highlighted by COVID-19. The report pointed to raises accomplished by Soda Well being, Mi Salud and Cayaba Care as an instance the elevated consideration to well being fairness.

Past enterprise funding, Rock Well being additionally analyzed digital well being M&A exercise and public exits. Q3 was the most important quarter up to now for digital well being M&A exercise with 79 offers in whole, in keeping with Rock Well being.

“One key driver of digital well being’s acquisition wave is the necessity to ship extra streamlined choices and experiences for purchasers,” the authors mentioned. “Clients – sufferers, suppliers, and employers alike – are all feeling overwhelmed by completely different digital well being choices out there and are pushing for extra unified choices.

“In response, digital well being firms are utilizing M&A to drive methods reminiscent of vertical integration, horizontal integration, and aggressive acquisitions.”

Contrasting the surge in M&A exercise is a slowdown of digital well being exits. In Q3 2021, there have been three accomplished SPAC mergers (Sharecare, Owlet and Sema4) and two IPOs (Definitive Healthcare and Cue Well being), in addition to one introduced SPAC and two introduced IPOs.

This can be a drop from the earlier quarter, which noticed 4 accomplished SPACs, 4 IPOs, and 7 introduced SPACs.


This yr has been one for the file books, as digital well being had already surpassed 2020’s full-year quantity final quarter.

Rock Well being says it’ll hold a watchful eye out for the rest of the yr since This autumn tends to be smaller than the remainder of the yr. But when This autumn 2020 signifies something, it’s that unprecedented funding is feasible at any time of the yr.


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