North America Digital Health Ecosystem 2022 Year End Report
Galen Growth is pleased to share with you our 2022 Year End insights and deep dive into the North America Digital Health Ecosystem. We focus our analysis on the ecosystem key trends, through the lens of:
- Key categories
- Disease areas
- Noteworthy partnerships
- Regulatory approvals
- Venture funding
HealthTech Alpha, a Galen Growth proprietary solution, powers this report!
- Digital Health Headlines
- Ecosystem Insights
- Investment Insights
- Cluster Focus
- Therapeutic Focus
- Deep Dives
- What’s Next?
- Digital Health has its feet back on the ground after the extraordinary 2-year pandemic period funding spree. In this year of geopolitical turmoil and looming economic recession, Digital Health is nevertheless proving resilient, with North America deploying funding that exceeds the pre-pandemic levels of 2019 by 1.6x and ventures submitting more than 214 regulatory filings.
- In North America, the first quarter of the year remained strong, exceeding the Q1 2021 funding value by 6%. However, funding experienced a steady decline across the first 3 quarters of 2022 and stabilized in Q4, with a final annual venture funding value of $20.6B, a YoY deficit of 46% below 2021, ushering in a new phase of Digital Health, with less extravagance and higher expectations for proof points and ROI.
- M&A activity has lost momentum, with a dip of 27% YOY in North America, however, industry consolidation is becoming stronger, with Digital Health ventures accountable for 60% of global acquisition activity. Acquisitions are being fueled by the slowdown in venture funding, with an average of only 63% of Growth Stage ventures having raised capital in the last 18 months in North America.
- Ventures in the Medical Diagnostics cluster had an exceptional year by accounting for 26% of all regulatory filings of Digital Health ventures in North America, taking the top spot for ventures with significant Clinical Evidence (Evidence Signal >40), and capturing the highest investment volume share (18%), with the total cluster funding value reaching the funding levels from 2021.
- Digital Health ventures in North America will find the path forward in 2023 to be more challenging, with declining venture valuations, but ventures have already shown resilience in 2022, and this new landscape will strengthen the pipeline of ventures, driving innovation and business model viability further to show the value of Digital Health tools for improving healthcare research and delivery.