Well being tech enterprise capital funding rebounds in 2025: report

Dive Temporary:

• Enterprise capital funding for healthcare expertise startups is rallying in 2025, with funding by way of the third quarter surpassing final yr’s complete, in line with a report revealed Thursday by PitchBook. 
• Startups raised $3.9 billion within the third quarter, down barely from the $4 billion and $4.4 billion, respectively, scooped up in the course of the first two quarters of the yr. The variety of offers elevated 12% in contrast with the earlier quarter.
• Common deal dimension rose to a file excessive of $7.7 million, suggesting that increased valuations — particularly for firms touting synthetic intelligence instruments — are driving bigger funding rounds, in line with the evaluation. 

Dive Perception: 

AI has been boosting digital well being funding in current months, as traders rush to pour funds into some of the thrilling rising applied sciences within the healthcare sector. 

A number of the largest funding rounds of the third quarter went to AI firms, together with a $243 million Sequence C for medical documentation and coding agency Atmosphere Healthcare and a $210 million Sequence B increase for AI medical info platform OpenEvidence, in line with the PitchBook report.

Ambient notetaking scribes, which usually file sufferers’ conversations with medical doctors and mechanically draft a medical notice, are one of many quickest rising use circumstances for AI, PitchBook stated. These instruments are supplied by quite a few startups, together with Atmosphere and Abridge, the latter of which has additionally raised two massive funding rounds this yr. 

AI-backed income cycle administration is one other main space for AI, the report famous. These firms have raised greater than $1.2 billion in enterprise capital funding since 2021.

The well being tech sector continues to be largely centered on “sensible” AI merchandise that increase workflows and handle administrative work, whereas “probably extra revolutionary applied sciences—similar to patient-facing agentic AI and platforms for early prediction of main well being occasions like coronary heart failure, sepsis, and seizures—have a option to go earlier than widespread commercialization,” the report’s authors wrote. 

In the meantime, the third quarter included a big uptick in exits for enterprise capital-backed well being expertise corporations. Forty-two firms notched exits in the course of the interval. Greater than half have been acquisitions of smaller seed and Sequence A startups, in line with the report.

However there have been no main well being expertise preliminary public choices within the third quarter, after the sector noticed the IPO market start to unfreeze after a protracted interval of stagnation earlier this yr. Digital musculoskeletal care firm Hinge Well being, went public in Might, and persistent situation administration agency Omada Well being hit public markets the next month. 

Coverage and financial uncertainty is probably going making firms rethink IPOs, specialists say. For instance, the sector is bracing for the affect of the One Massive Lovely Invoice Act, which is able to probably create hundreds of thousands extra uninsured People and financially pressure suppliers. 

“We don’t anticipate additional main healthtech listings in 2025,” the PitchBook report’s authors wrote. “Ongoing coverage uncertainty and a wait-and-see strategy from late-stage startups have probably pushed new IPO exercise into 2026.”