Funding for digital health start-ups, especially in mental health, fall substantially in Q1’22

Funding for digital health start-ups, especially in mental health, fall substantially in Q1’22

Global digital health funding falls 36% with fewer megarounds, IPOs (Fierce Healthcare):

After two years of record-breaking investment in digital health, capital flow into the sector took a dive in the first quarter of 2022.

The global digital health market saw funding decrease 36% from the fourth quarter of 2021, totaling $10.4 billion, as investors reacted to supply chain woes, the Russian invasion of Ukraine and a volatile stock market, according to a new CB Insights report.

While all tech sectors received smaller funding totals than the previous quarter, digital health plunged much further than others did … investor interest in mental health tech wavered as the market and public companies like Talkspace and Cerebral come under scrutiny. Mental health tech funding fell 60% from the previous quarter, hitting $792 million, the lowest funding level for the subsector since the fourth quarter of 2020…

The quarter could indicate a slower year for digital health startups overall as the pandemic-induced funding frenzy takes a backseat. Analysts expect M&A activity to hold steady, but external factors may continue to rock the global public and private markets.

The Report:

State of Digital Health Q1’22 Report (opens link at CBInsights website):

  • Description: After a record-breaking 2021, global digital health investment cools in Q1’22. Global digital health funding reached $10.4B in Q1’22, down 36% from the previous quarter. In our State Of Digital Health 2021 Report, we dig into global investment trends to spotlight keytakeaways.

News in Context:

  • A conversation at the frontier of digital health innovation, FDA regulations, and cognitive health
  • The National Academy of Medicine (NAM) shares discussion paper to help empower 8 billion minds via the ethical adoption of digital mental health and neurotech
  • A call to action: We need the right incentives to guide ethical innovation in neurotech and healthcare

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