After several uneven years for venture funding, the digital health sector saw a boost in investment during the first quarter of this year.
Digital health startups raised $4 billion across 110 deals during the first quarter of 2026, according to data published Monday by venture fund and strategy group Rock Health. That’s a $1 billion increase compared to the $3 billion raised across 122 deals during the first quarter of last year.
The average size of a digital health financing deal during the first quarter was $36.7 million, marking the highest average deal size since the fourth quarter of 2021. A wave of 12 megadeals — financings of $100 million or more — largely drove the increase.
Wearable device company WHOOP’s $575 million Series G marked the biggest deal of the quarter. The next five largest deals were raised by precision health company Verily ($300 million), AI-powered search platform OpenEvidence ($250 million), telepsychiatry provider Talkiatry ($210 million), employer-focused GLP-1 clinic eMed ($200 million) and mental health startup Grow Therapy ($150 million).
If this pace keeps up, this year will finish with almost 50 mega deals, which would be nearly double last year’s count of 26.
As for M&A activity, the first quarter showed modest growth. It ended with 43 digital health deals, up from 30 deals during the previous quarter.
Rock Health’s report noted that two of the most notable transactions were deals in which the acquirer purchased a health tech startup to recruit its specialized talent rather than to acquire its assets and revenue streams: OpenAI‘s acquisition of health data startup Torch and Headway‘s purchase of Tezi, which makes an autonomous AI recruiting agent.
In addition to the 43 M&A deals that occurred, there was a new venture that crumbled during the first quarter. In December, reports emerged that Matt Holt, former managing director and president of private equity at New Mountain Capital, had left the New York City firm to start a new venture combining five of its health tech portfolio companies in a deal valued at more than $30 billion. But the deal collapsed last month due to disagreements surrounding governance and financing.
Overall, the exit market remains open, but companies with sufficient capital or financial stability are mostly choosing to wait.
It’s also worth noting that the first quarter of 2026 marked the first quarter for which Rock Health stopped differentiating between AI and non-AI startups in its report. In this day and age, pretty much every digital health startup is AI-enabled in one way or another, so the lines are too blurred for this distinction to hold much weight.
Rock Health also cautioned that the digital health market is likely to remain volatile as broader geopolitical and policy uncertainty continues to shape investment decisions.
Shifting federal priorities, evolving healthcare regulations and macroeconomic tensions could all influence where capital flows in the coming quarters. In this environment, investors are expected to remain selective, concentrating funding on startups with clear paths to growth and sustainability.
Photo: Yuichiro Chino, Getty Images
