Funding slows down as investors reduce healthcare AI dealmaking.
Executive attention to artificial intelligence (AI) has skyrocketed following the public launch of OpenAI’s ChatGPT. In healthcare, decision-makers are actively evaluating solutions such as generative AI platforms, insurance underwriting support tools, and patient voice assistants.
While AI buzz has been building as of late, investors have been keyed into AI’s potential in healthcare for years. Investors poured $31.5B in equity funding into healthcare AI between 2019 and 2022. Moreover, healthcare has consistently been the top industry for AI deals. For firms like Andreessen Horowitz, healthcare is one of the key pillars of its AI investment strategy.
Today, there are over 1,500 healthcare AI vendors, over half of which were founded within the last 7 years.
Despite all the enthusiasm for AI, however, investors are making fewer healthcare AI deals amid a broader slowdown in global venture dealmaking.
In the face of this downturn in activity, we’ll dive into:
- Global funding trends
- Most highly valued startups
- Top-funded startups
- Most active investors
- Exit activity
Global funding trends
Healthcare AI companies have raised $2.6B across 192 deals in 2023 YTD.
By the end of the year, global healthcare AI funding is on track to fall by 28% year-over-year (based on run rate as of June 30, 2023).
Despite the slowdown in funding, average deal size is down just 3% from 2022 levels in 2023 so far. However, early-stage deal share has increased by 9 percentage points.