In the final quarter of 2023, the digital health sector witnessed a noteworthy surge in venture capital funding, totaling $1.1 billion spread across 57 deals. This uptick was primarily driven by investors’ continued enthusiasm for high-quality startups demonstrating robust unit economics and promising growth prospects. Notable contributors to this figure were Headway and Forward, both securing over $100 million each.

Despite this healthy quarter, funding levels remained notably lower than the peaks seen during the pandemic. Throughout 2023, the digital health landscape saw a total VC investment of $4.6 billion across 499 deals, a decline from the previous year’s $8.3 billion invested across 429 deals. The most funded categories for the year included primary & general telehealth, digital pharmacies & pharmacy partners, and teletherapy & behavioral health, collectively driving significant VC activity. Frisco, Texas-based What If Ventures emerged as the most active digital health VC investor, particularly focusing on mental health-oriented startups, underscoring the sustained momentum in this niche.

Read Pitchbook’s full report here.