Date: August 2025

Steady Venture Momentum with Increasing Deal Value

In the first half of 2025, U.S. digital health startups raised $6.4 billion across 245 deals. Moreover, this was slightly higher than the $6.0 billion recorded in H1 2024. While deal volume dipped (down from 273), the average deal size climbed to $26.1 million, driven by later-stage rounds and expanding AI investment. Consequently, the sector shows growing capital intensity despite fewer transactions.

AI Startups Secure Majority Share of Capital

For the first time, AI-enabled startups captured the lion’s share of VC investment in digital health: 62 % of funding, nearly $4 billion, flowed into AI-powered ventures. Their average raise (~$34.4 million per round) far outpaced the $18.8 million average for others—an 83 % funding premium. Mega-rounds ($100 million+) were dominated by AI players, accounting for 9 of 11 such rounds.

Investor Focus Shifts Toward Evidence and Scale

Investors are increasingly favoring scale-ready, outcome-oriented ventures. Startups now face pressure to deliver clinical validation and real-world ROI—evidenced by rising average funding per round, megadeals, and initial public offerings from Hinge Health and Omada Health. Ultimately, market maturity is replacing hype, with capital flowing into proven models.

Source: https://rockhealth.com/insights/h1-2025-market-overview-proof-in-the-pudding/ | https://www.fiercehealthcare.com/health-tech/healthcare-ai-rakes-nearly-4b-vc-funding-buoying-digital-health-market-2025 | https://medcitynews.com/2025/07/digital-health-venture-capital-healthcare-startup/ | https://www.galengrowth.com/digital-health-exits-navigating-2025s-shifting-tides-towards-maturity/