Digital health funding is holding steady — venture capital is flowing, IPOs are reappearing, and megarounds are back in force.
Startups in this space have raised $9.9 billion throughout the first three quarters of this year, according to new data from Rock Health. The third quarter yielded $3.5 billion raised across 107 deals.
During this past quarter, deal activity dipped. There were 107 deals — down from 120 in the second quarter and 124 in the first quarter — but the rounds that did close were larger on average.
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Some startups closed funding rounds totaling hundreds of millions of dollars. Examples include the $550 million round raised by value-based kidney care company Strive Health, the $400 million round raised by pharmacy benefit manager Judi Health (formerly CapitalRx), and the $243 million round raised by AI-powered documentation startup Ambience.
The average digital health deal size so far this year is $28.1 million, compared to $20.4 million in 2024.
Rounds totaling $100 million or more have accounted for nearly 40% of all digital health funding this year. Rock Health’s report noted that another exceptionally large round is likely coming soon, as wearable company Oura is expected to raise a $875 million Series E round.
The report also pointed out that the Series B stage seems to have become a hurdle for digital health companies.
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The number of Series B deals has declined sharply, with only 30 rounds completed through the third quarter of 2025, which is roughly half the annual volume seen over the past four years. Series B deal flow is slowing down relative to other stages as well — representing just 9% of financings through third quarter, down from 13% last year, while every other stage has either held steady or gained share.
The digital health fundraising market appears to be evolving, with the path to success becoming less straightforward, according to Rock Health. Many companies are raising unlabeled rounds between Series A and B, making it harder for investors to gauge which startups are truly ready to scale.
“There’s a set of companies raising quickly at high valuations — and then there’s everyone else. For those navigating the tougher path, the playbook is to find the moat and double down on clear differentiators. We’ve seen companies break through when they hit a meaningful milestone—like landing a major distribution deal, getting FDA clearance or proving commercial traction — that becomes the hook for the next round.” stated Becca Shmukler, partner at Million Lives Fund.
In a market where outsized rounds grab headlines, there are also startups that will end up thriving by navigating the less obvious path with focus and proof of value.
Photo: Bangon Pitipong, Getty Images