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April 10, 2024
Q1 2024 digital health funding: Great (reset) expectations
Summary
In Q1 2024, the digital health sector moved fully into a new funding cycle, securing $2.7 billion across 133 deals despite a challenging climate leading to smaller average deal sizes. The shift to creative financing and an emphasize on startups showing strong outcomes over high growth potential marked this period. AI investments dominated, capturing significant funding as attention to outcome-based evidence grew among stakeholders. Public market dynamics also evolved, with notable delistings signaling a recalibration of expectations around exits, emphasizing the need for digital health companies to adapt to more prudent growth forecasts and financial planning. The overall landscape suggests a maturing digital health sector with recalibrated success metrics, focusing more on sustainable growth, robust outcomes, and strategic exits, signaling a more scrutinizing yet promising future for innovators in the space.
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