Large funding rounds help boost digital health investment in H1

Dive Brief:

• Venture capital funding for digital health startups spiked in the first half of the year, but investment is continuing to concentrate in a smaller number of firms, according to research published Monday by Rock Health.
• U.S. digital health companies raised $7.4 billion across 244 deals in the first half of 2026, blowing past last year’s funding amount of $6.4 billion in about the same number of financing rounds, according to the analysis by the venture capital firm and consultancy.
• Median deal size rose to $14 million in the first half of the year from $12 million in 2025. And mega-deals, or rounds worth $100 million or more, made up 45% of all capital invested in the first half of 2026. 

Dive Insight:

This year’s digital health funding is on track to continue a recent upswing of investment in the sector, according to Rock Health. 

Funding in digital health companies soared in the wake of the COVID-19 pandemic in 2021, but investment totals began to collapse the following year as inflation and other macroeconomic factors tempered investors’ frenetic dealmaking in the sector. 

But funding rose again in 2025 after multiple years of declines, according to Rock Health’s tally, spurred by heightened interest in companies touting artificial intelligence tools. 

So far this year, U.S. startups raised $4.2 billion in the first quarter and another $3.2 billion in the second — slightly below last year’s second quarter funding total of $3.4 billion. 

Mega-deals continue to be a major feature of the digital health market, according to Rock Health. Nineteen companies raised 20 mega-deals in the first half of the year, compared with 27 in 2025.

Mental health continues to be the highest funded clinical indication for startups, clinching the top spot for seven years in a row. But weight management firms raised the second-most amount of money, driven by heightened demand for the popular GLP-1 weight loss drugs, according to Rock Health. 

Meanwhile, AI has become increasingly common among digital health companies, pushing Rock Health to stop labeling use of the technology as a distinguishing product or strategy. 

But AI is still impacting investors’ decision-making. The technology makes companies easier to create, so funders are increasingly looking for startup founders with healthcare expertise who can more easily understand buyers’ concerns and challenges, according to the report. 

Companies also have more incentive to scale — as AI can help create more products and handle workflows autonomously — and to ink strategic partnerships to build credibility with customers. Plus, buyers want more support from companies as they roll out their new technology tools.

“AI has made more tailored implementations possible, but has also flooded buyers with new options, raising expectations for measurable ROI and leaving little appetite for failed deployments,” the report’s authors wrote. 

Meanwhile, the digital health sector is still waiting for more companies to complete initial public offerings. Seven firms notched public exits last year, including companies like digital musculoskeletal firm Hinge Health and chronic condition management company Omada Health. None have gone public yet this year, though some companies, like wearable maker Oura, are nearing the finish line. 

Digital health startups are more likely to get acquired, according to Rock Health. The sector saw 115 acquisitions in the first half of the year, pacing ahead of last year’s total of 199 and well ahead of 2024’s 121 deals.