Digital health funding hit USD 28.8B in 2025 — mega-deals rewrote the market

Digital health raised USD 28.8B in 2025 as capital concentrated into proven winners; mega-deals surged and buyers demanded workflow ROI—shaping 2026.

Galen Growth today published its new flagship report, Global Digital Health 2025: Re-Priced, Re-Proved, Re-Focused. The report provides a data-driven assessment of how the digital health sector recalibrated through 2025 — and what this reset implies for investment, partnering, and adoption decisions in 2026.The findings are timely as healthcare executives, investors, and innovators convene around the J.P. Morgan Healthcare Conference week (12–15 January 2026, San Francisco). JPM week is where sector narratives are stress-tested against deal-making reality: what gets funded, what gets partnered, and what gets cut. In a market still defined by post-2021 discipline, the question is no longer whether innovation is happening, but whether it can scale inside real clinical and operational workflows.2025’s headline is clear: fewer bets, bigger cheques, and higher proof. Global digital health venture funding reached USD 28.8B in 2025 (excluding exits), up 9% year-on-year, while deal volume fell to 1,335 deals (down 33% year-on-year). In practical terms, capital did not return evenly after the correction. It concentrated into ventures able to demonstrate adoption, evidence, operational readiness, and a credible path to scalable distribution.

“2025 was the year digital health re-priced and re-proved itself,” said Julien de Salaberry, CEO of Galen Growth. “After the correction, outcomes didn’t revert to the mean. The market rewarded execution: ventures that can prove impact, deliver inside real workflows, and scale through defensible channels. As the exit environment starts to reopen, the cost of being wrong is higher — and the winners are increasingly identifiable.”

The strongest signal of concentration was the resurgence of mega-deals. Mega-deals (USD 100M+) accounted for 49% of all digital health funding in 2025, with 65 mega-deals totalling USD 14.0B. This winner-takes-more dynamic reshaped sector averages, improved the late-stage funding picture, and reinforced the market’s preference for scale and execution over experimentation.From an operating standpoint, the reset was not solely a capital markets story.

Buyers — particularly health systems — tightened requirements around workflow fit, measurable ROI, and integration accountability. Provider organisations were notably active: providers accounted for 18% of more than 2,370 partnerships disclosed in 2025, signalling deeper co-development and tighter alignment between innovation roadmaps and care delivery constraints such as workforce shortages, throughput pressure, interoperability requirements, and implementation capacity.Late-year patterns further illustrate the shift towards conviction capital.

Global Quaterly deal count reached a five-year low in Q4 (277 deals), yet average deal size rose 2.2x year-on-year to a five-year high of USD 34.1M in Q4. The combination of fewer deals and larger average rounds is consistent with a market underwriting fewer, more investable companies and extending runway for leaders, while leaving a larger long tail of ventures underfunded.Category-level signals point to what buyers and investors are optimising for. Workflow-adjacent solutions took momentum: Health Management Solutions emerged as a leading cluster by funding, with funding increasing by 50% and overtaking Research Solutions. This reflects a pragmatic shift towards solutions that can be implemented at scale and measured against operational and financial outcomes, rather than pilots that remain peripheral to core workflows.

Geographically, Europe strengthened as the fastest-growing region in the analysis, with funding rising 15% year-on-year in 2025. North America remained the centre of gravity by total funding volume. The report also captures differing regional dynamics in product formation: North America and Europe skew towards software solutions, while Asia Pacific and the Middle East show higher reliance on mobile applications — highlighting distinct commercialisation paths and deployment constraints across markets.On exits and consolidation, the sector pivoted from consolidation to capital formation. Acquisition volume fell 9% back to 2023 levels, while fundraising took centre stage. At the same time, the report highlights early signs of public market activity improving into 2026, even as 2025 saw limited SPAC activity. The practical implication is that the exit window may be opening gradually, increasing the premium placed on fundamentals and the penalties for low-quality growth.While headline funding improved, capital stress remained elevated outside the winners.

Global averages show only 23% of early-stage ventures, 31% of growth-stage ventures, and 47% of late-stage ventures raised funding in the last 18 months. This suggests a substantial share of the ecosystem is exposed to cash constraints, heightening the likelihood of down-rounds, acqui-hires, and consolidation, particularly among mid-tier ventures without a clear distribution advantage.For 2026 decision-making, the report frames a clear takeaway: discipline will outperform breadth. Investors should underwrite adoption mechanics and unit economics as rigorously as technology. Corporates should move from broad innovation scouting to fewer, deeper partnerships anchored in distribution and proof.

Health systems can standardise requirements around interoperability, measurable ROI, and workflow fit, and de-prioritise pilots without a credible pathway to scale. For ventures, novelty is no longer sufficient: winners will design for integration, instrument outcomes, and demonstrate value quickly.The full report is available for download here: [insert link]. Readers can also explore 16,000+ digital health ventures and related analytics in HealthTech Alpha, Galen Growth’s digital health intelligence platform.