- This year has already shattered digital health funding records, with $9.4 billion raised so far through the third quarter, according to a new report from Rock Health. That's already surpassed the previous record for most dollars raised in a year: $8.2 billion in 2018.
- The average deal size in 2020 has been $30.2 million, also a record — and about 1.5 times larger than the average of $19.7 million last year, as the pandemic drives sustained consumer interest in digital health and investors funnel more dollars into the sector.
- Megadeals have skyrocketed, with 24 digital health companies raising deals of $100 million or more through the third quarter, mostly concentrated in telehealth, R&D services and fitness and wellness. In that category, Zwift had the largest funding round with $450 million raised in a Series C.
As it becomes more clear that new realities brought on by the pandemic won't be short-lived, investors are pouring money into digital health — one of the few sectors that's actually benefited from COVID-19. In the third quarter, U.S.-based startups raised $4 billion, and each prior quarter saw at least $2.4 billion raised.
Rock Health said the industry is "just on the cusp" of the momentum from unprecedented demand among consumers. "As the pandemic continues to unfold, we are eager to see the industry come together to cement advancements already made this year, and continue on this trajectory," the report says.
The analysis jibes with others on digital health funding and speakers at CB Insights' conference last month. Analysts there noted particular interest in mental health platforms as people have reporting rising anxiety and depression amid the pandemic.
And CB Insights has also said healthcare investment more broadly has been robust in 2020. Worldwide funding for the industry hit a record $18.1 billion in the second quarter.
So far this year, on-demand healthcare services like prescription delivery and at-home urgent care have had 48 total deals and seen $2 billion invested, Rock Health said. The largest single deal was $250 million for prescription delivery service Alto.
The funding bonanza comes as several digital health companies have gone public in recent months, seeking to capitalize on the moment to drive growth.
That's on top of the sector's first megamerger in August, when telehealth giant Teladoc announced it was acquiring chronic care management platform Livongo for $18.5 billion. That deal is expected to close later this year.