Dive Brief:
- Digital health investment increased in the first quarter compared with the same period last year, but the funds are concentrated in a smaller number of companies, according to an analysis published this week by Rock Health.
- Startups raised $4 billion across 110 deals in the first quarter, compared with $3 billion across 122 transactions during the same time in 2025, the venture capital firm and consultancy found.
- Nearly 60% of the quarter’s digital health investment came from a dozen mega-deals, or rounds worth $100 million or more. “The first quarter of 2026 points to a market that is active, but selective,” the report’s authors wrote.
Dive Insight:
2026 has so far continued a trend of “haves and have-nots” in digital health funding, where some startups are quickly attracting large rounds while others are struggling to raise investment, according to Rock Health.
The average deal size during the first quarter rose to $36.7 million, the highest amount tracked since 2021, the report found. In comparison, the average check size last year was $29.3 million.
Twelve large rounds made up a significant chunk of the capital deployed during the first quarter, including a $575 million Series G raise by wearable company Whoop and a $250 million Series D round from artificial intelligence-backed medical information platform OpenEvidence.
If the pace of mega-deals continues, 2026 would end with 50 rounds worth $100 million or more, according to Rock Health.
Digital health funding increases in Q1
Meanwhile, AI continues to be an exciting investment prospect. Last year, digital health companies touting AI offerings made up 54% of total funding, increasing from 37% in the previous year.
Now, AI has become a core focus for many startups, making it hard to determine which rounds are “AI deals,” according to Rock Health.
“Historically, we’ve reported on funding for AI-enabled startups as a distinct category, but that distinction is blurring as AI becomes table stakes in how digital health companies and their offerings are built and delivered,” the report’s authors wrote.
However, the window for startups looking to go public is still narrow, according to Rock Health.
Few digital health companies have gone public in recent years, after a swell of startups took to the public markets amid a fundraising boom in the wake of the COVID-19 pandemic in 2021.
Last year, the outlook for digital health initial public offerings began to unfreeze after digital musculoskeletal firm Hinge Health and chronic condition management company Omada Health went public in May and June.
But policy and economic uncertainty can make it challenging for companies to decide when to go public, as they need to meet and exceed financial expectations set during the IPO process during their first quarters on the public markets, experts say.
And concerns about inflation and oil prices in the wake of the war in Iran have created volatile capital markets, according to Rock Health.
“With growing market volatility, the exit timing feels especially hard to predict,” the report’s authors wrote. “While there are murmurings of movement, the candidates we flagged to watch at year-end are still waiting.”
