Healthcare is the largest spending category in the US economy and one of the most heavily venture-funded. It has also produced one of the sharpest boom-and-bust cycles in modern venture. US digital health venture funding went from ~$7.4bn in 2019 to ~$29.1bn in 2021, then fell to ~$10.1bn in 2024, about 65% below the peak (Rock Health, reported). In between came a wave of SPAC mergers and IPOs (Clover, Babylon, Cano, Talkspace, Hims & Hers, Butterfly, Oscar, Bright, agilon) whose outcomes ranged from bankruptcy to a tenfold gain. From 2024 a new cycle formed around generative AI. This section covers who funds healthcare companies, how much they invested and when, why the 2020–21 boom happened and why it ended, the SPAC and IPO class and its fate, the AI rebound, and how experienced investors underwrite a healthcare company. Exits, private equity and consolidation are covered in section 19.
What the study covers
- 1Overview: four different asset classes under one name
- 2The investor landscape
- 3How much money, and when
- 4The boom (2020–21)
- 5The bust (2022–24)
- 6The AI cycle (2023–26)
- 7Underwriting a healthcare company
- 8Key numbers
- 9Landmark cases
- 10Pitfalls
- 11How an expert thinks about it
- 12Related sections