Reimbursement, data interoperability and risk aversion are holding back digital health innovation

Recent data from VC firm Rock Health on digital health funding numbers point to a declining trend of investments in early-stage funding, especially Series A and B. Of the 64 deals financed in Q1 2019, just four deals (or 6%) accounted for a third of the total capital of nearly $1 billion raised in this period. Venture capital funding in digital health startups is driven by several factors — liquidity, macro-economic environment and changing risk preferences. While it may not be a perfect proxy for the state of digital health innovation, the funding trends point to underlying factors that may be holding back technology-led innovation in healthcare.