Dive Transient:
- Digital well being funding in 2025 is monitoring forward of final yr as outsized fundraising rounds boosted the sector’s funding complete, based on a report by Rock Well being.
- Within the third quarter, U.S. digital well being startups raised $3.5 billion in enterprise capital funding throughout 107 offers. Funding for 2025 to date reached $9.9 billion, exceeding final yr’s $8.4 billion raised by means of the third quarter, the enterprise capital agency and consultancy stated.
- However startups are inking fewer middle-stage offers and avoiding rounds with a collection label, Rock Well being researchers wrote. In the meantime, the sector is seeing a rising variety of rounds price $100 million or extra, typically backed by giant, well-known traders.
Dive Perception:
Startups notched fewer funding rounds within the third quarter in contrast with earlier this yr, however the examine sizes had been bigger, based on the report. Common deal dimension for this yr reached $28.1 million, rising from $20.4 million in 2024.
Mega-deals, or rounds price $100 million or extra, have contributed to the development. Thus far in 2025, the sector recorded 19 mega-rounds — together with synthetic intelligence-backed documentation agency Atmosphere Healthcare, advantages platform Judi Well being and AI medical search software OpenEvidence — already surpassing final yr.
General, big rounds accounted for practically 40% of the yr’s complete funding, bringing in $3.8 billion of digital well being funding to date in 2025.
Nevertheless, some funding traits that arose within the wake of the COVID-19 pandemic are persisting, complicating the standard startup fundraising cycle, Rock Well being researchers wrote.
For instance, unlabeled raises, the place firms full funding rounds and not using a conventional Collection A or B label, elevated within the first half of 2023.
That appeared like a brief development, as firms with excessive valuations inked throughout the pandemic wanted more money however hadn’t but met milestones for an additional conventional spherical, based on Rock Well being.
However to date in 2025, 35% of this yr’s funding rounds have been unlabeled. That’s down from 44% in 2023, however far past the single-digit ranges earlier than 2021.
“These raises weaken the benchmarks traders and founders depend on to underwrite progress and complicate how enterprises assess which startups are able to accomplice at scale,” Rock Well being researchers wrote. “Two firms asserting unlabeled raises could also be in very totally different positions—one extending runway on shaky fundamentals, one other making ready for robust progress—but they appear the identical from the surface.”
Moreover, it’s taking firms for much longer to boost a Collection B spherical, and fewer firms are inking these middle-stage offers. Solely 30 Collection B raises had been recorded by means of the third quarter, in contrast with greater than 60 every year over the previous 4 years.
Together with the sustained improve in unlabeled raises, the misplaced center rounds additionally contribute to the unclear outlook for traders and patrons about which firms are able to scale, based on Rock Well being.
In the meantime, funding is flowing towards a narrower set of worth propositions. Instruments that deal with medical and non-clinical workflows for healthcare supply — like AI documentation instruments or income cycle administration merchandise — captured 42% of the sector’s funding to date in 2025.
The give attention to augmenting healthcare workflow is pushing some startups to accomplice with or purchase different firms so as to add new capabilities, based on Rock Well being.
M&A deal quantity is up 37% from final yr, with 166 acquisitions inked to date in 2025 in contrast with 121 for the total yr 2024.
