2021 was a record year for venture capital investments in digital health. A total of $30.7 billion was invested, a 107% increase from 2020. After such a steep funding acceleration , will the bubble in digital health investment burst?
No, says Jacob Effron, principal at Redpoint Ventures. Effron expects continued investor enthusiasm for funding companies in early rounds. He also predicts further company consolidations. However, Effron does caution that digital health companies may see less eagerness from investors in their pre-IPO rounds.
emocha Health CEO, Sebastian Seiguer, notes that the availability of funding has been tremendous since the COVID-19 pandemic started. According to Seiguer, VC firms are eager to invest in digital health companies that have the potential to make healthcare more efficient and convenient. Seiguer also notes, “There have been larger VC players entering earlier rounds of funding with larger check sizes.”
Alyssa Jaffee, a partner at 7wireVentures, agrees. Jaffee doesn’t see funding slowing down anytime soon. “When you’re building businesses in multi-billion dollar markets,”she notes, “there is a lot of value to be had if you can execute correctly.”