Digital health startups have experienced a significant uptick in fundraising, with $7.4 billion raised in the first half of 2026, surpassing the $6.4 billion raised in the same period last year. This growth is reflected in the number of deals, which remained stable at 244, but the nature of the investments has shifted towards larger amounts, with megadeals (valued at $100 million or more) constituting 45% of total funding.
The median deal size has reached $14 million, marking the highest level since 2022. Notably, mental health continues to dominate funding categories for the seventh consecutive year, followed closely by weight management, which is gaining traction due to the popularity of GLP-1 medications and emerging platforms in this space. Interestingly, nearly two-thirds of the startups in these categories are consumer-facing, highlighting a strong demand for direct-to-consumer solutions.
A key trend identified in the report is the diminishing impact of AI as a differentiator in the digital health landscape. Investors are shifting their focus from merely identifying companies that utilize AI to those that possess unique expertise and capabilities that AI cannot replicate. This includes evaluating founder experience, platform ownership, and the ability to form strategic partnerships, which are now seen as crucial competitive advantages.
Mary Minno from Treehub emphasized that the barriers to creating healthcare products have changed fundamentally due to AI, suggesting that the technological moat has shifted towards industry-specific knowledge. As AI adoption accelerates across various stakeholders in healthcare, investor interest is expected to grow, potentially leading to even higher funding levels in the upcoming months.