Digital health startups pulled in $15.3 billion in funding dollars across 572 deals last year. While still a hefty number, that $15.3 billion is just over half of 2021’s blockbuster $29.3 billion. And digital health funding in 2022 barely sneaked past 2020’s total of $14.7 billion, according to a 2022 funding report from Rock Health, a venture fund dedicated to digital health.

2022’s downhill ride signals the tail end of a macro funding cycle centered around the COVID-19-era investment boom, the report authors said…

“It’s too early to say whether we’ve reached the end of this macro funding cycle, or if more low funding quarters are on the horizon. With recession concerns looming, the first half of 2022’s quarterly average of $2.4 billion may be a bellwether for the next several quarters—which means that 2023 could be digital health’s first $10 billion or lower year in venture funding since 2019,” Rock Health researchers wrote.

Higher operating costs squeezed health system margins in 2022 while provider organizations also faced record-high burnout levels among doctors and medical staff. Health systems looked for ways to increase efficiency and reduce provider pain points, which boosted investments in nonclinical workflow solutions. Companies in that sector raised $2.2 billion last year… Read the full article here.