Flat is Good: CB Insights’ Q1 global digital funding, deal numbers finally steady

CB Insights’ quarterly global digital funding roundup had some good news for a change–the bleeding may be stopping, despite the failures of funding havens Silicon Valley Bank, Signature Bank, and First Republic Bank.

  • Funding was flat in Q1 2023 from Q4 2022 at $3.4B. Flat was positive, as every quarter in 2022 fell between 25%-35% versus the previous quarter.
  • Yet this was contrary to the decline seen in the total venture capital area, where funding fell 13% from Q4 2022 to Q1 2023
  • Deal numbers went up by 1% from Q4 2022’s 383 to 387–essentially flat, while venture deals fell again for four quarters
  • Leading in deals and funding was care delivery and navigation tech–44% of total funding and 37% of deals. It also had the largest deal size–$12.6 million–and five of the top 10 deals. Trailing a distant second was monitoring, imaging, and diagnostic tech, with 20% of total funding and 23% of deals.
  • In the back of the pack, early-stage companies made up a minimum of three-fourths of their deals: drug R&D tech (75% early-stage deal share), digital therapeutics & wellness tech (76%), and health insurance & RCM tech (81%)
  • In Q1, Europe’s digital health funding at 18% of total was $612 million. EU deals are picking up and are now at a record-high deal share (26%) in Q1 2023. US funding continued to lead, with $2.3 billion in digital health funding, equivalent to 68% of the global total. 
  • Mega-rounds remain anemic: 17% of digital health funding which is the lowest since Q2 2019. They were three: kidney care company Monogram Health’s $375 million raise, primary care provider Carbon Health’s $100 million, and fertility startup Kindbody’s $100 million. Comparing year prior for Q1, mega-rounds declined 85% between 2023 and 2022.
  • M&A exits finally increased in Q1–to 39 from 15 in Q4 2022

CB Insights summary points. The full report is available to their customers. Also Healthcare Dive.

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