Last year’s digital health investment trends have left some startups feeling uneasy about their ability to raise capital in the new funding environment. Healthcare startups raised $3.4 billion in the fourth quarter of 2022, marking the sector’s lowest quarterly funding total in the past five years. Q4 was also the first quarter with no new unicorn births since 2018, MedCity News reports.
These low funding totals and changing macroeconomic forces beg the question: which startups will prevail in their fundraising efforts, and which will fall by the wayside? Venture capitalists think companies that have a demonstrable return on investment and serve multiple stakeholders will probably have the easiest time securing capital. Not surprisingly, point solutions and startups in crowded markets will face a tougher environment.
Though digital health startups are raking in less capital than they were in 2020 and 2021, considering healthcare investment trends on a yearly basis is a shortsighted approach, Morgan Cheatham, vice president of Bessemer Venture Partners, pointed out. Instead, we must look at the overall trend. Read more.
