Dive Temporary:

  • Digital wellness funding appears to be flagging subsequent record investments throughout the initially two many years of the pandemic.
  • World digital health funding attained a 6-quarter reduced in the to start with quarter of 2022, ringing in at $10.4 billion, according to a new report from CB Insights. That is a 36% decrease from the fourth quarter of 2021.
  • Megaround funding additional than halved in the quarter, as buyers backed less discounts of $100 million or much more. And community exits mostly ground to a halt, most likely owing in component to disappointing IPO returns last year, with just a single IPO in the quarter. That is when compared to 23 in the fourth quarter of past 12 months, CB Insights claimed.

Dive Perception:

COVID-19 has spurred historic concentrations of funding in digital well being startups, as the pandemic proved the benefit thesis of digitally sent treatment. Some buyers warned of a opportunity digital wellness bubble, or at the very least a market place correction, following U.S. digital well being startups brought in a whopping $29.1 billion in 2021 — additional than double the yr prior.

It seems digital overall health funding is now losing some of the wind from its sails. In spite of COVID-19 situations ticking upward when once again, funding for digital health startups dropped in all world-wide areas in the 1st quarter, according to the new report from CB Insights.

In the U.S., digital wellness funding fell to $7.2 billion in the initial quarter of 2022, down 37% from the fourth of 2021.

Rebecca Pifer/Health care Dive, CB Insights facts

 

But a decrease in the frequency and volume of funding rounds was found throughout the board globally. Megarounds totaled just $4.4 billion in the quarter, creating up 42% of all electronic overall health bucks invested. Which is down from 57% in the fourth quarter of 2021.

The greatest deals of the quarter were being led by a $325 million Series E spherical for price-based kidney treatment service provider Somatus in February, with investors like major payer Anthem. That is followed by a $300 million non-public fairness offer for health messaging startup TigerConnect a $290 million Sequence E round for biotech startup Freenome, led by pharma huge Roche’s undertaking fund and a $235 million Collection F spherical for mental wellbeing tech startup Lyra Well being.

Irrespective of flagging investments, M&A exercise stayed robust, and is likely to keep on this 12 months as businesses search to round out their products and the marketplace matures, CB Insights reported. Electronic wellbeing M&A has held higher than 100 promotions for seven consecutive quarters, soon after getting off in 2021. CB Insights recorded 138 offers in the very first quarter of 2022.

Funding to the psychological health tech sector, which has viewed mammoth advancement through the pandemic, achieved $792 million globally in the quarter. Which is a drop of 60% from previous quarter’s record, and the lowest funding stage due to the fact the fourth quarter of 2020, CB Insights reported. Psychological overall health startups nabbed 8% of whole digital health funding in the first quarter, down from 12% in the fourth.

Telehealth startups have also brought in document funding spurred by COVID-19 that appears to be slowing. Funding to the telehealth sector declined by about a 3rd compared to the fourth quarter of final calendar year, even as the number of over-all discounts ticked up just about 12%.