Straight talk: digital health is not in a bubble
Investment in digital health has boomed in recent years with adoption rapidly increasing amidst the pandemic and a favorable regulatory environment. After a record-breaking year for digital health investments in 2021, funding moderated in Q1. Naturally, everyone is asking the question: ‘Is digital health in a bubble?’ Our answer: No, but it’s frothy out there.
Certain realities, such as increasing deal sizes and high cash burn rates, may have analysts worried about an impending boom-to-bust cycle. However, not all indicators point to a bubble. In most cases, the digital health hype doesn’t supersede the business fundamentals, and there are clear areas where innovators and investors can mitigate risk. Innovators should target opportunities in the sweet spot: where markets are gaining traction and infrastructure is already established. Additionally, forward-looking leaders can work to lengthen their cash runway ahead of potentially tighter financial markets. The fundamentals of the digital health investment sector are strong, with room for massive growth to make digital technologies a core part of our healthcare system’s DNA.
Several members of our team will be in New York City in May and are hosting a digital health community happy hour on Tuesday, May 10th from 5-7pm on the Lower East Side. If you’re interested in joining and connecting with local innovators, please fill out this form (please note, space is limited).
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