Investments in Digital Health in the US grew 91% and globally 45% in 2020.

2020 Market Insights Report: Chasing a new equilibrium

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As the pandemic laid bare many of the healthcare industry’s vulnerabilities, it also accelerated adoption of digital health—from virtual care models to data-driven drug discovery. In response, both incumbent healthcare institutions and entrepreneurs demonstrated tremendous leadership and innovation. The pandemic also spurred widespread change in provider and consumer behavior and led to an unprecedented influx of investment in digital health.

Digital health entrepreneurs, investors, enterprise healthcare leaders, and even non-healthcare companies took advantage of this moment to sprint towards digital health innovation at an unprecedented pace.

Across 2020, US digital health companies raised $14.1B in venture funding, the largest amount of capital deployed in a single year since Rock Health began tracking funding in 2011. This amount represents a 72% increase from the previous high water mark set in 2018. $5.9B was raised in the first half of 2020, with H2 delivering the most funding in a half-year ever with $8.2B. Investors also closed more deals than ever before, with 440 deals in 2020 compared to 378 in 2019 and 383 in 2018—15% growth in investment activity over the past 36 months.

In addition to closing more deals, digital health companies also raised more per deal. Over the past 36 months, average deal size increased from $21.5M in 2018 to $31.9M in 2020. Average deal size was largely bolstered by 40 mega deals, rounds of $100M or more, which accounted for more than half (57%) of total 2020 funding.

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