Rock Health’s 2025 digital health roundup, published in January, was upbeat–as usual, and in no way Hemingwayan. Their calculation of US digital health fundings was up 35% versus 2024, rising to $14.2 billion from 2024’s $10.5 billion. This was a higher number and a stark contrast to Silicon Valley Bank’s (SVB) tracking of US and EU healthtech investments as a 1) lower number and 2) flat 5%, growing from 2024’s $13.2 billion to $13.9 billion [TTA 14 Jan].
Let’s do some unpacking:
- The number of digital health deals went down from 509 to 482, a decline of 5.3%.
- In terms of current dollars, 2025’s funding of $14.2 billion was, as projected, a snap back to 2020’s $14.4 billion, as 2024 was to 2019. In constant/inflation-adjusted dollars, applying a cumulative inflation of 25%, 2025 is well under 2020 but better than 2019; 2020’s $14.4 billion then is equivalent to $18.3 billion today.
- Where Rock Health and SVB agree is the ‘barbell’ profile of what gets funded.
- Mega funds like General Catalyst and Andreessen Horowitz (a16z) do mega deals: 26 mega deals and 15 newly-minted unicorns (up from six last year), for a funding average by these two in D+ of $266 million, versus Series A of $24.1 million.
- The funding also skews towards “AI-enabled” companies and secondarily, wellness
- Something that made this Editor go ‘hmmm…’:Rock Health’s usual analysis of letter deals across all funders is, unusually, missing in their 2025 report. The only comparison made is from GC and a16z, two mega funders. Inadvertently, Rock Health has drawn a bright line on the contraction of venture and private equity funders not only in available funds, but in sheer numbers. Discussed here intermittently, especially in the context of SVB’s failure and rescue, but at more length here in this 2023 commentary.
- What they have picked up that SVB didn’t was the continuing significant number of unlabeled, non-letter financings–35% of deals, but down from 44% in 2023. Before 2021, unlabeled financings were fairly rare and in single digits.
- The other significant pickup was that over 600 companies they track have not raised anything since 2021-2022. That could be a sign of health–that they are profitable and operating successfully on their cash flow–or barely staggering through and cannot get financing.
- M&A revived in 2025 with 195 deals in 2025, up 61% from 2024’s crater. Digital health companies were the majority acquirers (66%) with private equity at 10%. Rock Health attributes this to ‘tapestry weaving’ (creating more continuous solutions to flesh out platforms), legacy acquisitions by AI companies (a/k/a smush togethers, something New Mountain Capital excels at), and ‘acqui-hires’ to get top talent and tech.
- They note of NMC: “Now, they’re weaving the largest “M&A tapestry” in digital health thus far: Matt Holt, NMC’s former managing director and president of private equity, is reportedly leaving to combine five NMC portfolio companies into a $30B holding company called Thoreau.”, a $30 billion deal broken out in a graphic. The five companies are Datavant, Swoop, Machinify, Smarter Technologies (itself a combine of SmarterDx, Thoughtful.ai, and Access Healthcare in RCM), and OfficeAlly. Whether this pending move (December) will actually work or turn into a petite version of Change Healthcare, we can only surmise.
- IPOs haven’t really revived in digital health. Rock Health counts five IPOs in 2025, but only two are really digital health, Hinge Health and Omada Health, same as 2024. Both were at relatively flat valuations. The other three are more legitimately classified as biotech–Heartflow, Carlsmed, and Profusa. IPOs may improve in 2026, with Doc.com’s filing for a Nasdaq listing earlier this month and Devoted Health now at a post-F financing.
- There is zero here about bankruptcies and reorganizations. No reference to the utter implosion of 23andMe and its shocking sale back to founder/CEO Anne Wojcicki.
The impact of ACCESS and ELEVATE. There is also a good graphic analysis of two CMS models that may support digital health more comprehensively than previous value-based care models such as ACO shared savings. The first CMMI model, ACCESS, will be debuting in July and is a 10 year voluntary payment model for Original Medicare outcomes in chronic care management. It reduces barriers for digital health to profitably work with CMS because it offers direct patient enrollment and waiving copays. The other from CMS is ELEVATE, launching in September, which funds up to 30 proposals with $100 million over three years to raise health and prevention for Original Medicare beneficiaries.
2026 remains Anyone’s Guess. It feels better…but….
Editor’s Note: Our Readers know that this Editor considers Rock Health a bit of a cheerleader for Sand Road. They play both sides of the fence as a venture fund/accelerator. There’s nothing wrong in that. SVB, like other financial institutions, funds a broad swath of healthcare and makes no bones about it. That is why their analysis, which also included EU and a bit of Asia, made its broader and tarter take on 2025 even more interesting.
What’s missing is year-to-year consistency in Rock Health’s analyses, notably what digital health sectors were funded and the Series letter breakdown across all funders.
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