Digital well being firms raked in $10.4 billion globally throughout 653 offers within the first quarter this yr, a 36% drop from the fourth quarter, in line with CB Insights’ State of Digital Well being Q1 report.
That marks a six quarter low as funding slows down from the blockbuster funding seen final yr.
“Digital well being startups noticed a bigger funding drop-off in Q1 ’22 than the fintech and retail tech sectors, which solely noticed 18% and 11% funding decreases quarter-over-quarter, respectively,” the report’s authors wrote.
Within the U.S., digital well being funding hit $7.2 billion throughout 329 offers, down from $11.5 billion throughout 331 offers in This autumn. Funding in Asian startups reached $1.3 billion, a 55% lower from the final quarter, whereas European funding was down 19% at $946 million.
The report attributes a number of the funding downturn to a lower in mega-rounds, offers value $100 million or extra. There have been 27 within the first quarter – bringing in $4.4 billion – in contrast with 43 within the fourth quarter final yr.
In the meantime, funding in psychological well being tech fell 60% quarter-over-quarter, digital therapeutics funding declined 53% and telehealth funding dipped 32%. Nonetheless, the variety of telehealth offers did enhance 12% between This autumn and Q1.
Within the public markets, IPOs fell considerably, with just one IPO recorded in Q1 in contrast with 23 within the ultimate quarter of final yr. There weren’t any particular goal acquisition firm offers, down from six in This autumn.
Six new unicorns – firms valued at $1 billion or extra – had been born final quarter, lower than half of the variety of new unicorns from This autumn. The report discovered two-thirds of the brand new unicorns included persistent situation administration instruments.
Nonetheless, mergers and acquisition exercise held regular throughout the first quarter, counting 138 offers in contrast with 137 final quarter. There have been 100 or extra M&As for the previous seven consecutive quarters.
“Consolidation took off in 2021 and remained elevated in Q1’22, with 138 offers. As dominant gamers emerge on this fragmented market, we anticipate to see this consolidation development proceed,” the report stated.