Digital Health Revitalized Returns to the Industry and Investment Sectors’ Priority Dashboard

Galen Growth Report Shows Sector Resilience and Hunger for AI, ChatGPT and LLMs Tech Fuels its Speed to Renewed Relevance

You’re wrong if you thought the digital health sector was assigned to the critical care ward! The first half of 2024 reinforces that the industry is maturing and demonstrating its essential role to payer, provider, and product innovator’s patient-care effectiveness and operational efficiency.

With an impressive $12.4 billion invested across 719 deals, this period defied expectations of a prolonged funding winter and showcased remarkable growth. These deals span a wide range of digital health subsectors, from AI and LLMs to health information management and connected medical diagnostics. The industry saw a significant surge in momentum in Q2 2024, outperforming Q1 with $7.1 billion in funding compared to $5.3 billion.

Key areas such as AI, LLMs, health information management, connected medical diagnostics, and research solutions (i.e., TechBio) have emerged as focal points for VC and corporate incubators, accelerators, and equity funds, so critical to providing the financial and strategic support necessary to jump-start early-stage companies. A steady stream of M&A activity and strategic partnerships indicate ongoing global digital health market consolidation.

Galen Growth has been tracking every detail and deal and analyzing the digital health sector’s ups and downs, and it has now returned to the forefront of the C-Suite. To arrive at its analyses, Galen Growth tracks some 500 million data points across 30,000 sector players. Medika Life was able to preview some of the data to provide these highlights. Our assumption all along is that the spike in COVID-era investment was pure enthusiasm absent due diligence and that the category would rebound. This report confirms that hypothesis.

Medika Life readers can access the H1 2024 report here:

H1 2024 Growth

The $ 12.4 billion investment in the first half (H1) of 2024 is a significant milestone, marking a 5% increase compared to last year’s H1 2023. This robust performance challenges the narrative of a funding winter, showcasing sustained investor confidence. Q2 outpaced Q1 significantly, with a 34% increase in funding, indicating growing momentum.

“Anyone who thought digital health growth is stagnant was proven wrong by this recent finding data.  Investors find the value in these innovations – the challenge that remains is about the culture of the health sector – the role of the health care community in embracing these technologies,” reflects WebMD Chief Medical Officer John Whyte, MD, MPH, who has been a national voice on the potential of smart medical devices to improve people’s care.

More than 1,600 investors participated in H1 2024, with 50 making more than three investments, up from 47 in the previous year. This suggests a renewed confidence and a growing core of committed digital health investors. Key indicators such as the high number of mega deals and the significant proportion of funding directed towards AI-enabled companies underscore this trend.

Key Trends and Insights

Generative AI and AI- and LLM-enabled companies continue to gain investor attention, particularly in health information management. Despite comprising only 40% of the venture ecosystem, AI-enabled companies received 56% of the venture capital in the sector. This trend highlights the critical role of AI in driving innovation and attracting significant investment in healthcare.

“I believe that AI and large language models represent a new and unique level of revitalization for digital health.  The utility and functionality of many digital health devices can be transformed through artificial intelligence and large language models (LLMs). It’s this fundamental transformation that breathes life into what was a lackluster and ‘gadget-based’ initiative,” offers John Nosta, a global innovation thought leader who speaks to the “Age of Cognition” and how it impacts the future of medical care and technology.

The US and North American countries led digital health funding, while Europe remained the second-most funded region. Future reports will provide deeper insights into these trends with a detailed regional breakdown and analysis.

Mega-Deal Investments

Mega deals were crucial in the Digital health funding landscape during H1 2024. The period saw 26 mega deals (deal value ≥ $100 million) totaling $4.9 billion, accounting for 39% of the overall funding. This represents a 9% increase from H1 2023, which recorded 24 mega deals amounting to $4.5 billion. The average mega deal size reached its highest since 2019, at $191 million.

“The significant increase in mega deals and the robust M&A activity in H1 2024 highlight a maturing ecosystem rapidly consolidating and strategically repositioning itself,” said Galen Growth Founder and CEO Julien de Salsberry to Medika Life. “These insights are crucial for stakeholders to understand the evolving dynamics of the market and to make informed decisions that will drive future growth and innovation in the Digital health space.”

Notable Mega Deals:

  • Xaira Therapeutics – $1,000 million (ARCH Venture Partners, Foresite Labs)
  • Formation Bio – $375 million (Andreessen Horowitz)
  • Freenome – $254 million (Roche)
  • PharmEasy – $216 million (MEMG)
  • Blackrock Neurotech – $214.3 million (Tether)

The geographical distribution of these mega deals highlights continued US dominance in attracting substantial investments. Of the 26 mega deals, 22 were secured by U.S.-founded companies, underscoring this nation’s engaged digital health ecosystem.

US Digital Health Funding by Investment Stage

The distribution of funding across various stages suggests a vibrant investment cadence supporting companies at different growth phases:

  • Early-stage deals: 132 deals (32% of all deals)
  • Series A: 88 deals
  • Series B: 65 deals
  • Series C: 42 deals
  • Series D & Beyond: 35 deals
  • Other Stages: 43 deals across various other stages.

Acquisitions and Sell-Offs

Mergers and acquisitions (M&A) activity in the Digital health sector remained robust in H1 2024, with 96 deals completed, a slight increase of 2% from H1 2023. This steady pace of M&A transactions demonstrates the industry’s ongoing consolidation and strategic repositioning.

  • Noteworthy Transactions:
  • Altaris Capital Partners acquired and delisted Sharecare for $518 million.
  • Roche acquired the LumiraDx point-of-care technology platform for $295 million.
  • Click Therapeutics acquired assets from the bankrupt Better Therapeutics.
  • LabCorp acquired some assets from Invitae, a genetic testing company.

The elevated activity in M&As and asset acquisitions reflects the dynamic nature of the Digital health sector, with companies adapting to market conditions and consolidating resources.

Partnerships and Collaborations

The Digital health sector witnessed an almost unchanged collaborative environment during the first half of 2024, with 1,730 partnerships recorded, a slight 2% decrease from H1 2023. Healthcare providers emerged as the primary drivers of partnerships, forging 306 collaborations. This underscores the growing integration of digital solutions in traditional healthcare settings.

Newsworthy Collaborations:

  • Nvidia – Nine partnerships focusing on health AI applications.
  • Medical Diagnostics and Health Management Solutions – Key areas for venture-to-venture partnerships, indicating a trend towards leveraging complementary technologies and expertise.

Regional Funding Snapshots

United States: The U.S. maintained its dominant position, attracting $9.5 billion across 405 deals, up 14% year-over-year. The distribution of funding across various stages reveals a revived and focused ecosystem supporting companies along the growth cycle.

Europe: Despite a 10% decrease in funding to $1.52 billion across 158 deals, Europe remains the second most heavily funded region. The funding landscape showcases diverse investment stages, indicating a healthy and maturing ecosystem.

Asia Pacific: Asia Pacific attracted $1.17 billion across 118 deals, down 7% from H1 2023. Despite the decreased funding, the region remains strong in diagnostic technologies and patient-centric digital solutions.


The first half of 2024 has demonstrated the resilience and evolution of the digital health sector. With substantial investments and strategic collaborations driving innovation and growth, the $12.4 billion funding across 719 deals underscores renewed investor enthusiasm. The sector’s solid M&A landscape and increasing mega-deal activity convey a maturing ecosystem poised for continued integration into the mainstream health ecosystem.

As digital health ventures in the US, Europe, and Asia Pacific push the boundaries of health innovation, the groundwork laid during H1 2024 suggests a transformative future for the industry. Data from H1 2024 means that the digital health venture C-suite and investors can breathe a sigh of relief as valuations stabilize and deal flow continues.

This outlook calls for careful and informed decisions driven by proof points and facts, steering away from the speculative fervor of the COVID era.   The reflections of Galen Growth’s Julien de Salsberry reinforce that digital health – an expansive innovation field – that warrants payers, providers, and product innovators full attention:

“The Digital health sector’s resilience and sustained growth, as evidenced by the $12.4 billion investment in H1 2024, is a testament to the unwavering confidence of investors in the transformative potential of digital health technologies. This data underscores innovation’s critical role in enhancing healthcare delivery and outcomes globally.”


Medika Life has provided this material for your information. It is not intended to substitute for the medical expertise and advice of your health care provider(s). We encourage you to discuss any decisions about treatment or care with your health care provider. The mention of any product, service, or therapy is not an endorsement by Medika Life

Gil Bashe, Medika Life Editor
Gil Bashe, Medika Life Editor
Health advocate connecting the dots to transform biopharma, digital health and healthcare innovation | Managing Partner, Chair Global Health FINN Partners | MM&M Top 50 Health Influencer | Top 10 Innovation Catalyst. Gil is Medika Life editor-in-chief and an author for the platform’s EcoHealth and Health Opinion and Policy sections. Gil also hosts the HealthcareNOW Radio show Healthunabashed, writes for Health Tech World, and is a member of the BeingWell team on Medium.


Editor in Chief, Medika Life

Meet the Medika Life editor-in-chief, working closely with founding editors Robert Turner and Jeff Livingston, MD.

Not your usual health-industry executive, Gil Bashe has had a unique career shaped by more than three decades in health policy, pharma, life science, digital health, eco-health, environmental innovation and venture capital and informed his determination to ‘give back.’

A champion for health innovation that sustains people’s lives and improves their care, Gil honed his perspectives on both battlefield and boardroom. He started in health as a combat medic in an elite military unit. He went on to serve as a clergyman tending to the ill; as a health products industry lobbyist in environmental affairs; as CEO of one of the world’s largest integrated health marketing companies; as a principal in a private equity-backed venture; as a Medika Life author and Health Tech World correspondent; and as Chair Global Health and Purpose at FINN Partners, a community of purpose dedicated to making a difference.

In the forefront of change, Gil is ranked as a Top 10 Digital Health Influencer; Medical Marketing & Media Top 10 Innovation Catalyst; Medika Life named him a “Top 50 Global Healthcare Influencer,” and PM360 presented him with its “Trailblazer Lifetime Achievement Award.” He is a board member for digital health companies and is an advisor to the CNS Summit, Galien Foundation, Let’s Win for Pancreatic Cancer, Marfan Foundation and other health-centered organizations.





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