In Q3 2024, the digital health sector continued on its track of small but mighty, with disciplined investment and strategic activity as the name of the game. While deal count dropped compared to prior quarters, average check size held steady, suggesting that funders are making calculated bets on fewer companies. Companies are launching new products and partnerships to improve consumer experiences. Retail and tech brands continue to roll out health programs and features on blockbuster products. Some digital health players are carefully planning IPOs, while those that aren’t faring well on the public markets are recalibrating through take-privates. Meanwhile, other companies are using strategic acquisitions to expand their product offerings—a trend we’re watching closely and will dive into later in this piece.
Q3’s digital health innovation story was less about funding volume and more about company moves and market positioning—specifically how digital health players are building up their offerings to compete with legacy healthcare players and market incumbents. Read on for a market overview and deeper look into recent strategic moves, particularly in mergers and acquisitions (M&A).
Q3 2024 market activity
In Q3 2024, the U.S. digital health sector logged $2.4B in venture funding across 110 deals, bringing year-to-date funding to $8.2B. Though deal count has dropped across the first three quarters of 2024—Q3 logged 110 deals, compared to 136 and 133 in Q1 and Q2 2024, respectively—average deal size held steady at $22M in Q2 and in Q3, up from $20.7M in Q1 and roughly matching 2023’s average deal size ($21.6M). These patterns indicate that investors are making fewer, more focused bets with consistent check sizes.