Digital Health Market Outlook
Market Outlook
- After a strong performing Q1’25, global equity funding declined in Q2’25, with funding totaling $4.4B — a 21.4% decrease quarter-over-quarter.
- Despite this decrease in funding, the average global deal size has increased from $15.5M in 2024 to $22.2M through H1’25, ultimately spurred by larger investments in later stage rounds as well as the bolstering impact of AI.
- Following a H1’25 that was driven by significant AI funding, increased provider tool adoption, and successful IPOs, investor sentiment remains positive for H2’25, with confidence in the sector’s continued growth and market maturity.
- The U.S. market share of funding remained the same in Q2’25 as it was in Q1’25, at 54%, reflecting a consistent level of investor interest. This stability may be attributed to ongoing optimism in the sector, bolstered by significant AI-driven investments and growing confidence in digital health’s long-term potential, despite broader economic and policy uncertainties.
- Among the quarter’s top fundraising deals were Neuralink’s $650M Series E round, led by G42 and Valor Equity Partners, and Pathos’s $300M Series D round led by undisclosed investors.
- Digital health M&A activity saw a slight decline from Q1’25 to Q2’25, as the number of M&A exits decreased from 50 to 43, respectively. The largest M&A deal of Q2’25 was Roper Technologies’ $1.85B acquisition of CentralReach, a provider of EHR, practice management, and clinical software focused on behavioral health practices.
Industry Snapshot
$4.4B
Global equity funding in Q2 2025
$22.2M
Average global deal size in H1 2025
54%
U.S. share of global digital health funding in 2025
43 M&A Exits
Down from 50 in Q1 2025, reflecting a slight dip in transaction activity
30%
Healthcare providers with full EHR interoperability achieved by 2025
80% faster
EHRs reduce the time required to access patient information
