Tag: rock health

Rock Health: Innovation at the Turn of 2026

Posted on by Jason Barry

Rock Health is wrapping up the year in style by updating its Innovation Maturity Curve with the hottest trends of 2025 and sharing its predictions for what lies ahead.

The curve uses three major data points to plot innovation:

  • Research volume – gauges the potential of a topic through PubMed publications.
  • Venture funding – tracks investment as a leading indicator of commercial interest.
  • Partnership activity – uses industry partnerships as a proxy for commercial traction.

The pace is picking up. Here’s a look at the categories that defined the year:

Longevity (Maturity Score: Developing) – Companies are pushing past one-off diagnostics to see whether personalized baselines can anchor ongoing care. Function Health just hauled in a massive $298M Series B for its “operating system for human health,” and other players like Hone Health have started expanding their models with in-home services.

  • Keep an eye on: How much will insights on hormones or heart health translate into adjustments that patients actually act on? Rock Health expects this segment to hinge on turning long-arc patterns into timely guidance that’s both credible and valuable.

Mental Health Chatbots (Maturity Score: Emerging) – Some AI chatbots might be shutting down, but just as many are doubling down. Slingshot burst onto the scene with $93M to build “the world’s first foundation model for psychology,” and incumbents like Spring Health have even started launching bots to evaluate the safety of other bots.

  • Keep an eye on: Regulatory scrutiny is intensifying as states begin banning AI-driven therapy. Some startups might be able to navigate the roadblocks, but Rock Health thinks others might pivot to lower-risk territory like keeping patients engaged between visits.

Health Benefits 2.0 (Maturity Score: Emerging) – OOP spending continues to climb, while employers just notched the steepest benefit cost increase in 15 years. Those pressures cracked a window for non-traditional models to gain traction, such as ICHRA frontrunners Thatch and Venteur.

  • Keep an eye on: The benefits pressure cooker is heating up in 2026, which means this category isn’t going anywhere. As more costs shift to consumers, Rock Health anticipates the benefits experience to start looking even more like a set of adjacent marketplaces rather than a single plan.

The Takeaway 

Digital health is moving faster than ever, and AI is only going to keep accelerating innovation. Rock Health’s full report is well worth checking out for more details on these categories and other up-and-coming segments like wearables (smart rings are especially hot), precision medicine (digital twins had a big year), and climate health (think allergies and air pollution).

Rock Health Q3 Overview: Signals Out of Sync

Posted on by Jason Barry

Rock Health’s always-excellent digital health market overview painted an interesting picture for Q3, with venture funding continuing to climb despite several “signals out of sync.”

We’re steady on the surface. Digital health startups raised $3.5B across 107 deals in the third quarter, outpacing last year by a decent margin and bringing the year-to-date total to $9.9B across 351 rounds [Chart: Q3 Funding].

  • Deal volume continued to slow, but fewer raises yielded larger checks. Q3 saw 107 funding rounds, down from 120 in Q2 and 124 in Q1.
  • The average raise in 2025 now stands at $28.1M (up from $20.4M in 2024), and we’ve already seen 19 mega-rounds above $100M – surpassing last year’s total with a quarter left to go.

The middle is murky. Rock Health rolled up its sleeves and calculated widely variable trends in mid-market funding.

  • Series B deal flow has thinned, with just 30 raises through Q3, compared to an average of more than 60 annually over the past three years.
  • As fewer startups reach Series B, those that do are stretching the range of what a B round can be. Series B deal sizes so far in 2025 spanned $11M–$210M ($199M) – the widest spread since the boom of 2021.
  • Pair that with the persistent prevalence of unlabeled raises, and the thinning Series B pipeline suggests that startups are traveling increasingly winding roads to reach scale.

Activity is concentrating around workflows. The biggest theme of the Q3 report was that Clinical Workflow and Non-Clinical Workflow are now 2025’s two most-funded value propositions, capturing a combined 42% of the total funding [Chart: Value Propositions].

  • A $1.3B lead separates these value propositions from the rest of the pack, and workflow tools now appear to be in a league of their own.

Startups are heading horizontal. The report also highlighted a growing group of startups pushing into adjacent workflows, such as Abridge’s partnership with Highmark Health (expanding into prior auths) and Judi Health acquiring Amino (moving into patient navigation).

  • M&A volume is up 37% from last year, with 166 acquisitions through Q3 (already topping 2024’s 121 total), in large part due to these horizontal moves. 

The Takeaway

The numbers look steady, but the market is also steadily splitting in half. That means that the real story going forward won’t be whether digital health startups can attract investors (they can), but whether companies can demonstrate the impact needed to land on the right side of the divide. 

Catching the Right Wave in Digital Health

Posted on by Jason Barry

The ocean of digital health innovation seems to have a wave of new trends breaking every year, which is why Rock Health teamed up with LG NOVA to give enterprises a framework for “discerning promising currents from passing swells.”

Riding the wrong hype cycle can strain health systems’ limited resources with costly implementations or investment mistakes, so Rock Health divided the digital health landscape into 50 segments to see which show the most promise based on:

  • Value potential (VP) – share of total digital health venture funding, disease burden (degree of economic cost), and addressable population size.
  • Capturable opportunity (CO) – funding velocity, funding concentration (share of capital already held by large companies), and market maturity.

The “Goldilocks” waves include segments that are big enough to support a large market and ripe enough (but not too ripe) for new entrants to gain traction. [Chart: Strongest DH Segments]

  • High VP, High CO: Weight Management stood out with the highest scores in both VP and CO. The disease burden and funding levels don’t get much higher, and the balance of early- and late-stage companies signals a strong market with room for new entrants. 
  • Low VP, High CO: Patient Adherence was docked for its smaller share of overall digital health funding, but stood out for its favorable funding concentration and market maturity.
  • High VP, Low CO: Disease Monitoring had the opposite mix. The segment enjoys a large slice of the funding pie, but most of that is getting eaten by a few mega companies.
  • Low VP, Low CO: Dermatology received the low marks across the board, with poor scores for funding velocity, disease burden, and overall share of funding.

To complement its framework, Rock Health analyzed over 70 digital health unicorns to find other success signals from waves that the industry is already riding. Unicorns tended to:

  • separate from the herd with larger Series C rounds (ex. Abridge)
  • support care delivery or access and are often consumer-facing (ex. Wheel)
  • be therapeutic area agnostic w/ broad addressable markets (ex. Included Health)

The Takeaway

Timing the digital health market is no small feat, but Rock Health’s framework provides a helpful tool for those looking to catch the best wave with their investments and implementations.

Rock Health Q1 2025 Funding Recap, Late-Stage is Back

Posted on by Jason Barry

In a first quarter packed with uncertainty and policy shifts, digital health didn’t skip a beat.

Rock Health’s Q1 Digital Health Market Update counted $3B in venture funding across 122 rounds (up from $2.7B in Q1 2024), and it sounds like there’s finally some optimism in the air again.

Early-stage startups dominated the deal count, with Seed, Series A, and Series B raises comprising 83% of labeled rounds in Q1 (in line with 86% last year).

  • Those included some extra-large investments like Achira’s $33M Seed, Open Evidence’s $75M Series A, and Hippocratic AI’s $141M Series B.

The bigger story was the triumphant return of late-stage mega-rounds, headlined by Innovaccer’s $275M Series F and Abridge’s $250M Series D.

  • While Q1 only clocked five raises that were Series D or later, this cohort lifted the quarter’s median Series D+ round size to $105M – almost double the $55M median Series D+ size seen in 2024.

Success in this climate requires “leapfrogging.” Rock health devoted a large section of the report to its four strategies for leapfrogging over market shifts using their unique circumstances.

  • Tapestry Weaving – using M&A to integrate new features and offerings into your capability mix. Of the 46 M&A deals tracked in Q1, 67% involved digital health startups acquiring other digital health startups, up from 53% across 2024.
  • Modular Tech Stacks – designing flexible infrastructure that reduces dependencies and allows for new integrations. Lumeris’ newly introduced Tom AI platform is a perfect example, leveraging capabilities of 60+ LLMs depending on use case.
  • Platforms and Channel Partners – building platforms that can plug in channel partners and key experiences. Q1 was brimming with good examples, including Eli Lilly bringing GLP-1 partners onto Lilly Direct and Teladoc expanding its Connected Care Program.
  • Engaging Disruptors – embracing solutions that challenge the status quo. Rock Health highlights Labcorp’s participation in Teal Health’s $10M raise, which proactively aligned it with an in-home cervical cancer screening startup that’s disrupting traditional pap tests.

The Takeaway

Following a year of valuation corrections and down-rounds, digital health VCs are showing signs of life, but we’ll have to wait until Rock Health’s next report to see if the momentum can stand up to a trade war.

Rock Health 2024 Overview: David vs Goliath

Posted on by Jason Barry

If last year’s digital health market felt like David vs. Goliath, Rock Health’s full-year funding recap has you covered with the reason why.

Here’s 2024 by the numbers:

  • U.S. digital health funding totaled $10.1B across 497 rounds 
  • Continued downtrend in investment (2023 was $10.8B total, 503 rounds)
  • Shift to early-stage companies drove the dropoff

There’s a tale of two trends unfolding between the early-stage startups and late-stage incumbents battling for market share, and neither side is helping out the funding total.

  • Investors began focusing on early-stage startups throughout 2024, and a whopping 86% of labeled rounds went to Seed, Series A, and Series B startups.
  • Larger companies also started to see smaller checks, with the median Series C and D raise clocking in at $50M and $55M, respectively (down ~10% from 2023). 

The shift to earlier-stage investments was driven by an appetite for startups that can show traction with small/medium sized organizations, especially among increasingly influential mega-VCs like General Catalyst and Andreessen Horowitz.

  • These smaller orgs want gen AI capabilities, aren’t a top target for massive IT players, and can be a goldmine for the startups that can fill that gap.  
  • The mega-VC influence in digital health follows a broader trend, with PitchBook data showing that 50% of all venture capital raised in the U.S. last year went to just nine firms… out of 391 total VCs. GC and a16z happened to rank #1 and #2.

Since it wouldn’t be a 2024 recap without the magic two letters: AI investment reached a fever pitch, and AI-first startups took home 37% of the overall funding.

  • Goliaths in this space include incumbents like Epic, the healthcare divisions of Big Tech players like Microsoft, and younger startups with the warchest to compete like Commure.
  • Rock Health sees a future where the AI Davids can continue thriving by addressing specialized use cases or smaller customer segments, as long as they keep an eye on the roadmaps of their bigger competition to avoid getting stepped on.

The Takeaway

If the healthcare industry wants to keep innovating, it needs companies of all shapes and sizes to make it happen. Rock Health’s 2024 recap is a good reminder that not every startup needs to be a Goliath, and that the Davids are still finding success by right-sizing their operation to the customers they serve.

Rock Health’s Innovation Maturity Curve Heading Into 2025

Posted on by Jason Barry

Rock Health is wrapping up the year in style by updating its Innovation Maturity Curve with the hottest trends of 2024, and sharing its predictions for what lies ahead.

The curve uses three major data categories to plot digital health innovations:

  • Research volume – gauges the potential of a topic through PubMed publications
  • Venture funding – tracks investment as a leading indicator of commercial interest 
  • Partnership activity – uses industry partnerships as a proxy for commercial traction

Here’s how 2023’s biggest trends progressed over the course of the year:

AI in Healthcare (Maturity Score: Developing) – Digital Health Wire readers know the AI hype cycle is still in full swing, with AI-first digital health startups landing $3.3B in venture capital through the end of Q3. AI partnerships also surged (Rock Health counted 80+, an undercount if anything), but 2024’s plateau in research activity gave another sign that we’re transitioning to practical applications and commercialization. 

  • Keep an eye on: We’re entering a phase of AI consolidation, with cutthroat competition for major accounts in segments like ambient documentation. As Big Tech inks their own partnerships and juggernauts like Epic double down on new features, “AI enablement will become table stakes across solutions rather than a core differentiator.”

Digital Obesity Care (Maturity Score: Developing) – Moving up from “Nascent” on last year’s curve, the conversation around obesity care has been transformed by GLP-1s and contributed to a rise in digital platforms to help patients access treatment and support.

  • Keep an eye on: Increased competition necessitates differentiation. With GLP-1 access still in flux, players need to build momentum with more than just prescribing (precision treatment planning, biometric tracking, support for co-occurring conditions like PCOS).

Food as Medicine (Maturity Score: Emerging) – FaM moved from a niche term to a buzzword (props to Rock Health for helping it happen), with category funding doubling on-year after big raises from players like Foodsmart ($200M). Payors, providers, and grocers contributed to over 30 new FaM partnerships this year.

  • Keep an eye on: FaM innovation is closely tied to reimbursement models for food delivery and nutrition consultations, so continued success hinges on sustained policy support. Assuming that happens – seems likely given the Make America Healthy Again chatter – 2025 could be another huge year.

The Takeaway

With the digital health recalibration now (mostly) behind us, Rock Health expects 2025 to give innovators a chance to demonstrate a measurable impact on outcomes and continue their trek along the maturity curve. The whole report is well worth checking out for details on smaller up-and-coming categories like new wearable form factors, digital twins, and climate tech.

Rock Health Q3 Update: Tapestry Weaving

Posted on by Jason Barry

Rock Health’s Q3 Digital Health Market Update showed that investors have found comfort strolling down a path of “focused funding,” with last quarter’s innovation story shifting from transaction volume to market positioning.

The U.S. digital health sector logged $2.4B in venture funding across 110 rounds in Q3 2024, bringing year-to-date funding to $8.2B. 

  • While Q3’s 110 rounds marked a slowdown from 136 in Q1 and 133 in Q2, average investment size held steady at $22M quarter-over-quarter, indicating that investors are honing their focus while continuing to make sharp plays.
  • The analysis also noted that investments are overlapping with partnerships, with companies keen to support startups they’ve already worked with in crowded spaces like healthcare AI – as seen with NVIDIA and Hippocratic AI.

The real narrative behind last quarter’s activity was what Rock Health referred to as “tapestry weaving,” or digital health players building up their offerings to compete with legacy leaders and market incumbents. The related graphic was easy on the eyes.

  • While Q3 mergers and acquisitions were also low at just 21 moves – versus a quarterly average of 37 last year – companies like Dario and Fabric are using M&A to integrate new capabilities and expand their footprint.
  • Like weaving a tapestry, both Dario’s addition of Twill and Fabric’s acquisition of TeamHealth VirtualCare stitched together different solutions to create a more robust platform and address a broader range of customer needs. 

Tapestry weaving isn’t exactly an easy hobby. It involves integrating different products, teams, and go-to-market strategies that all have a chance of backfiring along the way.

  • Big acquisitions help compete for big contracts, but they can also strain the acquirer’s balance sheet.
  • CVS is an easy example. In the last six years, CVS used $88B to add a major payor, a clinic operator, and a home-care provider to its flagship pharmacies. The entire company is now valued at less than the cost of those three moves ($83B current market cap).

The Takeaway

Although the raw count of digital health investments continues to drop off, activity volume isn’t the same as activity quality. The tapestry weaving trend is a reminder that the “true impact of digital health innovation is shaped in the details,” through its investment structures, targeted partnerships, and post-M&A playbooks.

Rock Health Q1 2024 Funding Recap

Posted on by Jason Barry

If Rock Health’s Q1 2024 Digital Health Funding Report makes one thing clear, it’s that the times of transition are behind us, and we’re now fully entrenched in a new digital health funding cycle.

The first quarter saw $2.7B in digital health venture funding across 133 rounds, marking the lowest quarterly total seen since 2019. It’s not as bad as it sounds.

  • Although total funding wasn’t trending in the right direction, the pace of the funding was actually healthy, and the 133 rounds was the highest in the last six quarters.

The average transaction size of $20.3M mostly tells the tale of growth-stage companies having to justify their valuations based on clinical outcomes rather than fancy storytelling.

  • Crowded markets are pushing enterprise customers to seek out outcomes data as a way to differentiate players and evaluate value-for-investment.
  • As outcomes data becomes a moat and a customer draw-in, investors are seeking out companies that can demonstrate efficacy early – making outcomes data more central to fundraising conversations… and at earlier stages.

AI drove a record share of funding. While not exactly too surprising, AI-enabled companies captured 40% of Q1’s funding total ($1.1B across 45 deals), compared to 33% of 2023’s funding pot and 29% of 2022’s.

  • As AI energizes the sector, it isn’t too hard to follow the funding to the areas with the most perceived promise: scribing, precision medicine, and care enablement.
  • Abridge raised a colossal $150M Series C, AI precision health company Zephyr AI landed a $111M Series A, and a suite of high flying startups landed huge rounds, including Ambience Healthcare ($70M), Fabric ($60M), and Codametrix ($40M).

The last theme is familiar: creative fundraising continues to be a crowd favorite, especially as public market delistings cause investors to rethink their exit potential.

  • Nearly half (48%) of Q1’s funding rounds were unlabeled, compared to 44% of all transactions in 2023.
  • Founders are going above and beyond to entice investors with more upside in the event of an exit, as seen with Transcarent structuring its $125M Series D to offer funders 2.5x their investment should the company M&A or IPO. 

The Takeaway

Expectations have been reset for digital health startups, causing them to evolve their strategies and reorient around different metrics of success (strong outcomes / margins vs. high projected growth). These expectations are undoubtedly higher than they were during the pandemic era of loose capital, but that’s probably not a bad thing for a sector that’s still striving for maturity.

Rock Health 2023 Full-Year Funding Recap

Posted on by Jason Barry

Rock Health’s 2023 digital health funding numbers are in, and although they’re every bit as bleak as expected, there were some silver linings that could bode well for the year ahead.

Here’s 2023 by the numbers:

  • US digital health funding totaled  $10.7B across 492 rounds ($21M average)
  • Q4 funding totaled $1.9B across 122 rounds (lowest quarterly total since Q3 2019)
  • Unlabeled rounds accounted for a record 44% of annual total
  • Surprisingly no pronounced spike in startup shutdowns

Last year’s $10.7B funding total was the lowest seen since 2019, but Rock Health points out that the real story often gets missed by the headline number. (Chart: Funding Trend)

  • Most startups tend to raise every 12-18 months, however Rock Health’s database shows that 81% of US digital health startups that raised in 2021 or earlier haven’t closed a subsequent labeled round.
  • Silent rounds (quiet raises from existing investors), Series extensions, and unlabeled rounds appear to have been the tools of choice to stay afloat.

Rock Health’s predictions for 2024 

  • Labeled raises will return – The startups that extended their runway with creative financing will need to produce proven outcomes data or showcase new products to keep investors interested. This year will separate the best from the rest, and the latter group will be looking at adjusted valuations (down rounds) or restructured cap tables.
  • M&A pace will accelerate – 2023 failed to produce the uptick in M&A that was expected to be brought on by attractive valuations, due in part to “higher for longer” interest rates and market volatility. In 2024, getting acquired will start to look like the best path for startups struggling on the fundraising front. (Chart: M&A Trend)
  • The public market cohort will recalibrate – After a year without a single digital health public exit, we should see a few of the late-stage players that delayed their listing to wait out market choppiness finally take the plunge, especially those with strong financials. (Chart: Digital Health Exits)

The Takeaway

While last year definitely delivered on “financial creativity” from nimble founders, the transition period can’t last forever, and Rock Health expects some startups will have to face the music in 2024 (i.e. raise at a reduced valuation, seek an acquisition, call it quits). Those are tough decisions to make, but the silver lining is that they’re also the decisions that will strengthen the sector in the long run (i.e. smaller cohort of stronger companies, platform synergies unlocked through M&A, and a more successful IPO class).

Digital Health at the Turn of 2024

Posted on by Jason Barry

Rock Health is wrapping up the year in style by sharing the trends it believes are most likely to move the needle in 2024, based on where they stand along its “innovation maturity curve.”

The top trends were plotted along the curve to reflect their funding momentum, research volume, and partnership activity, revealing insights into which innovations are ready to make the leap from hype to impact.

  • Food as Medicine (Maturity Score: Nascent) – Nutritional recommendation platforms are moving beyond their historically narrow set of use cases (“niche” support for type 2 diabetes) to a variety of conditions ranging from mental health to cancer. Keep an eye on: As legislation and reimbursement pathways continue to expand in 2024, more providers will start using food as medicine to differentiate their care delivery models.
  • Digital Obesity Care (Maturity Score: Nascent) – Although GLP-1s were one of this year’s hottest topics, weight management support services like remote monitoring and behavioral coaching are also coming along for the ride. Keep an eye on: Supply chain and accessibility challenges will continue to constrain GLP-1s, and payors could push for more precise triage to determine who gets priority for medication-based programs.
  • AI in Healthcare (Maturity Score: Developing) – AI startups were one of the only groups spared from the venture funding slowdown, raising nearly $2.8B across 101 rounds through Q3. Keep an eye on: Providers and payors will be solidifying their approach to AI governance and thoroughly assessing the tradeoffs between platform-level integrations (EHR plugins) and best-in-breed solutions (built for specific features).
  • Value-Based Care Enablement (Maturity Score: Developing) – With the most partnership growth in the analysis, VBC enablement is gaining commercial traction and moving closer to maturity. Keep an eye on: As health systems continue to consolidate, VBC solutions might be pushed toward platform-ization to address more needs, especially in areas where they’re easiest to adopt (solidified, attributable care pathways).
  • Data Interoperability (Maturity Score: Calibrating) – Interoperability infrastructure is still under construction, with the ONC only recently onboarding the first cohort of QHINs, but commercial partnerships are picking up as regulations stabilize. Keep an eye on: Data will be increasingly important as more powerful analytics tools become available, and disruptive solutions will need built-in insights capabilities as a value-driver.

The Takeaway

If 2023 was digital health’s transition year, Rock Health expects 2024 to be its recalibration year. Major innovations have begun their trek along the maturity curve, and it’s now time to build the strategies that will give them the staying power to keep progressing.

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