Digital health funding is experiencing a significant surge in 2026, driven largely by advancements in AI technology. A recent report from Rock Health reveals that funding in this sector has exceeded last year's total by $1 billion in just the first half of the year.
The report indicates that U.S. digital health startups secured $7.4 billion through 244 deals in the first half of 2026, compared to $6.4 billion from 245 deals during the same period in 2025. While the second quarter saw a slight dip in funding to $3.2 billion from $4.2 billion in the first quarter, it remains comparable to the $3.4 billion raised in Q2 2025. This upward trend suggests a recovery from the post-pandemic funding landscape.
Notably, the median deal size has increased from $12 million in the first half of 2025 to $14 million in 2026. Mega deals, defined as those exceeding $100 million, are becoming more prevalent, accounting for 45% of total investments in the first half of 2026—up from 42% in 2025. Mental healthcare continues to lead in funding, with startups like Talkiatry and Grow Therapy raising substantial amounts, while weight management initiatives are also attracting significant investments, particularly in the GLP-1 space.
Despite a slowdown in digital health IPOs this year, with no public exits reported in 2026 following seven in 2025, the sector is witnessing a robust increase in mergers and acquisitions. The first half of 2026 recorded 115 acquisitions, marking the busiest M&A activity since Q3 2021. This shift indicates a strategic pivot towards consolidation within the industry, as companies adapt to the evolving digital health landscape.