This year's digital health fundraising environment requires startups to focus more on their unit economics and pathway to profitability, according to Ian Wijaya, managing director at Lazard. He predicted that the ability to achieve profitability will be much more important in 2024 than it has been in the past four years or so.
Going into 2023, investors think the abilities to demonstrate a measurable return on investment and prove technology’s clinical validation will be the most important factors determining the success of digital health companies, according to a recent report, While the ROI factor is a given, it’s a bit more compelling that investors cited clinical validation as a major driver of success. Sunny Kumar, a partner at GSR Ventures, said clinical validation “is the best signal of patient value and historically has been under-captured in digital health.”
Digital health’s Q3 saw the lowest quarterly funding total in the past 11 quarters, but experts don't think this trend should be a cause for concern. They said it's important to remember that the mega-boom of 2020 and 2021 was an anomaly for the sector.