Investment in the digital health sector continues to fall. The fundraising in 2023 of €12.15 billion in 1,397 fundraising agreements represents a return to figures not recorded since 2016 or 2014: a setback of a decade. In this context, the United States continues to be the country that obtains the most investment in this sector, taking more than half of the agreements. This is stated in the State of Digital Health 2023 Report from the market intelligence platform CB Insights.
According to this report, mega-funding rounds in the digital health sector have almost disappeared, falling to three rounds of more than $100 million (€92 million) in the fourth quarter of last year, the lowest figure since 2016. In total, in 2023 there were 20 mega rounds, falling well below the average number of rounds of this type per quarter in 2021. But despite these unflattering figures, the average deal stood at €3.68 million, the highest since data is recorded in this area.
2023 was also the year of the collapse of the digital health unicorns, according to the CB Insights report. For the first time, the loss of companies of this size has exceeded the consolidation of this type of company , a trend that is explained by a mix between the disappearance of startups and the fall in investment.
Find out why investments in the digital health sector have fallen in 2023 and read the most important financial news of the day with our companion app Born2Invest.
The M&A dynamics of the fourth quarter of last year indicate that the digital health sector would be consolidating
There are also signs to anticipate the entry into a consolidation phase of the digital health business. The merger and acquisition (M&A) of companies in this area almost doubled in the fourth quarter of 2023. The report’s authors believe that if private investment continues to decline alongside initial public offerings (IPOs), M&A will flourish as the best option for cash-strapped companies.
The areas of care delivery and navigation technology continue to be those that attract the most investment after raising more than €770 million in the fourth quarter of last year. These areas are followed by diagnostic, imaging and monitoring technologies with €461 million.
(Featured image by geralt via Pixabay)
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First published in PlantaDoce. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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