Q3 2023 funding: small(er) but mighty

One theme that stood out at last week’s Rock Health Summit: the times have changed, and there’s no going back. Capital markets have created a radically different fundraising environment for digital health founders and investors, and there won’t be a speedy return to the previous interest rate or venture climate. With $2.5B raised across 119 deals, Q3 2023 is the fourth of the past five quarters where the U.S. digital health sector logged a funding total in the $2B range—firmly adjusted from the $6-8B quarterly totals of 2021-2022, reflecting a newly stabilized funding cadence.

Within this tighter funding environment, founders are learning a new rhythm, while speed and agility no longer supersede the need for commercial durability and outcomes data. Healthy companies are learning to work from within the system—inclusive of its complex financial structures and incentives—to drive sustainable change. These shifts are reflected in Q3 2023’s shuffled funding ranks by value proposition and therapeutic area, with new digital disease treatments and workflow tools topping the charts, joined by value-based care approaches for high-cost, high-complexity conditions like kidney care. Read Rock Health’s take on Q3 2023 to learn more about hot investment areas, overall funding conditions, and budding confidence around digital health’s performance on the public markets.

Headlines

Private Equity-Owned Healthcare Companies To Join In $3B Merger
Virgin Pulse and HealthComp merge to create all-in-one employer healthcare platform The Wall Street Journal

Transcarent Launches Direct-To-Employer Solution With Major Health Systems
+ In other employer-focused moves, Kindbody and Rightway partner to expand fertility care offerings Fierce Healthcare

Costco Offers Health Care To Members In Deal With Sesame
$29 online health appointments announced in retail’s latest healthcare bid Bloomberg

Providence Just Launched A Startup For Maintaining Patient Relationships
Praia Health is fourth spinout from Seattle-based health system Endpoints News

Recent Funding

• AI-based drug discovery platform Evozyne scores $81M
• Doceree lands $35M for its provider-focused programmatic marketing tools
• Women’s midlife care company Midi Health collects $25M
• Cartwheel Care snags $20M to scale student telemental health solution
• Evvy tacks on $14M for precision medicine vaginal microbiome care
• Portable cardiac care diagnostics startup QT Medical locks down $12M
• Partum Health seeds $3.1M for interdisciplinary pregnancy and postpartum support
• Long-term and acute care management and administration tool Savoy Life earns $3M