- Digital health funding reached a record-breaking $4.0B in Q3 2020 for a total of $9.4B year to date, according to the latest Rock Health quarterly report.
- Twenty-four (24) digital health companies have raised mega deals of $100M or more through Q3 of 2020. The rise in mega deals reflects a trend towards capital concentration in digital health venture investment.
- On-demand healthcare services is the top-funded value proposition with $2.0B invested across 48 deals through Q3 2020; it is also the value proposition with the most number of deals.
Digital health funding reached a record-breaking $4.0B in Q3 2020 for a total of $9.4B year to date as it continues to be the largest funding year ever, according to Rock Health, a full-service venture fund dedicated to digital health.
Despite the COVID-19 pandemic, the stock market’s sharp recovery and pandemic-initiated policy and regulation changes are driving large competitive moves and commercialization activities in the digital health sector. The Digital Health Market Insights: Q3 Update report reveals 24 large mega deals are driving the top-line numbers. The average deal size in 2020 is $30.2M, 1.5 times greater than the $19.7M average in 2019.
Impact of COVID-19 Accelerating Digital Health Adoption
Since April, Rock Health reports the COVID-19 pandemic has accelerated digital health adoption as it attracted interest from consumers, investors, and entrepreneurs. Deal volume through Q3 in 2020 is up nearly 22% compared to all of last year.” This activity comes amidst a record stock market rebound and hopes for a vaccine before the end of the year—however, medium-term economic uncertainty still looms. The impending risk of future outbreaks, lockdowns, and the upcoming presidential election all create uncertainty around recovery.
Here are three key trends to know from Rock Health’s latest report:
1. Mega deals are on the rise—particularly in virtual care delivery, R&D enablement, and fitness & wellness
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Twenty-four (24) digital health companies have raised mega deals of $100M or more through Q3 of 20201. This already doubles the previous annual record of 12 mega deals set in 2018. These deals account for well over one-third (41%) of total digital health funding so far this year with connected fitness company Zwift raising the largest round so far—$450M in Series C funding.
Source: Hit Consultant
