WORKWEEK

A new Rock Health report showed digital health funding in 2021 nearly doubled from $14.9 billion to $29.1 billion, the largest year-to-year increase ever. 

The Deets

The number of deals in 2021 increased by 50% to 729 deals. 2021 had some of the largest digital health deals ever, with 88 mega deals (over $100 million raised) accounting for 57% of the year’s total funding. Some highlights: 

• Noom: $540 million 
• Ro: $500 million 
• Mindbody: $500 million
• Commure: $500 million 

As predicted, digital mental health funding nearly doubled and held its place as the highest-funded digital health sector. Diabetes digital health funding—which more than doubled year-over-year—followed behind mental health. I have my money on diabetes management startups in 2022. 

While funding was raining on startups, an average of 23 digital health startups exited via M&A per month, and a total of 23 startups exited via SPAC/IPO—double and triple 2020 numbers, respectively. 

But Why? 

Digital health wasn’t the only area having funding field days: venture capital investment across all industries doubled to around $330 billion in 2021. So, many industries may be seeing the same funding pattern as digital health. As capital investment grew, so did the number of digital health VCs that excitingly got their foot in the game with serial investments in early funding rounds. Consequently, Series A and B funding grew 38% and 23%, respectively. 

Digital health funding in 2022 may be more significant than in 2021. However, 2021 seems to have been the year of building, meaning 2022 will be the year of execution. I know which companies I have my money on.