Predictions for digital health funding in 2024

Predictions for digital health funding in 2024

Leaders in digital health foresee investors having a high bar for funding in 2024, looking toward companies with proven modalities and a clear pathway to profitability.

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In 2024, digital health executives anticipate a shift in funding dynamics, emphasizing the importance of proven value for healthcare providers and patients. Companies demonstrating utility are expected to thrive, while those lacking value may dissolve. Executives predict a surge in mergers and acquisitions within the digital health industry, driven by intense competition, limited capital, and the prevalence of single-solution vendors.

Russell Glass, CEO of Headspace, foresees increased consolidation, emphasizing the necessity for companies to collaborate or face dissolution due to competition and capital constraints.

Amit Khanna, SVP and GM of health at Salesforce, anticipates a split in digital health funding. Traditional funding may decrease due to macroeconomic conditions, but genAI companies, particularly in clinical and drug discovery, are expected to attract increased funding by addressing documentation challenges and improving trial efficiency.

Kourosh Davarpanah, CEO of Inato, predicts a stringent approach to venture capital and private equity investments, favoring companies with proven product-market fit, robust margins, and a clear path to profitability. He suggests a pivot towards health tech funding in the biopharma sub-sector.

Ann Bilyew, SVP at WebMD Ignite, highlights the need for clarity in business models and sustainable scalability, predicting a correction in the digital health market after a period of overinvestment, with successful companies rising while others may sell early or shut down.

Neil Patel, Head of New Ventures at Redesign Health, envisions a flight to quality, with successful digital health companies seeking acquisitions, raising capital, or engaging in insider rounds for Series A+ companies. He expects a strong early seed funding environment.

Matthew Stoudt, CEO of AppliedVR, acknowledges the challenging funding landscape but anticipates a positive shift in 2024. He emphasizes the return to fundamentals, a flight to quality, and investors deploying accumulated capital. Companies with clear pathways to profitability are expected to thrive, contributing to a more rationalized market.

Overall, the consensus among these executives is that companies demonstrating value, clear business models, and scalability will thrive, while others may face challenges or dissolution in the evolving digital health landscape of 2024.

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