According to Venture Intelligence, healthtech funding fell to $447 million last year from $707 million in 2024. Funding had peaked at $2.62 billion in 2021, before declining to $1.07 billion in 2022 and $682 million in 2023.
“We believe the healthcare sector is not just a software-led opportunity. Investors are backing healthcare models that span the spectrum of integrated care and own patient outcomes,” said Ankur Khaitan, principal at venture capital firm Fireside Ventures. “In healthcare, technology alone cannot solve the problem; success requires an interplay between technology and care, with AI (artificial intelligence ) built in as core infrastructure.”
Top healthcare funding deals in 2025 highlight this theme.
PB Healthcare Services, a PB Fintech affiliate, raised $161 million, the most by a healthcare startup in the country in 2025. Two other major fundraisers were clinical laboratory and diagnostic services provider Neuberg Diagnostics ($109 million) and direct-to-consumer Ayurvedic wellness product supplier Kapiva Ayurveda ($60 million).
While most deals during the Covid-19 pandemic in 2021 and 2022 were tech-led innovations, that’s no longer the case.
“During Covid, startups building solutions in online consultations and remote radiology gained interest from investors, but many of them failed to scale up post-Covid,” said Shreyan Maralur Lakshmi Prasad, mergers and acquisitions head at InCred Capital.
This is partly due to consumer behaviour reverting to physical consultations and many hospitals building their own solutions, he said.
Overall healthcare funding, meanwhile, increased to $862 million in 2025 from $844 million a year ago, but fell short of the levels seen in the preceding three years.
The marginal growth in healthcare funding reflects the capital-intensive nature of offline solutions, said Gaurav Porwal, chief operating officer at W Health Ventures. “Offline means asset-heavy and slow—two things which are very difficult for VCs (venture capital funds) to put their money in. Startups that didn’t follow this grew fast initially but eventually flattered, so the outcomes for VCs were not good.”
W Health Ventures in July 2025 launched a $70 million second fund for backing at least two healthcare startups a year.
The shift in investor sentiment became evident when Accel-backed healthtech startup Onco shut down operations in early 2025. The cancer-care startup ran an online consultancy platform which allowed cancer patients to book treatment packages. It was later acquired by Apollo Hospitals Group, according to the LinkedIn profiles of its founders.
“Hospitals in India hold all the power,” Harsh Pokharna, who invested in Onco in 2022, wrote in a LinkedIn post in July 2025. “If you’re aggregating them, you’re at their mercy on payments and contracts. Digital-only healthcare sounds great in pitch decks, but people don’t pay enough. Healthcare here is still very much offline, and building physical centres is brutally capital-intensive—each takes 12-24 months to break even.”
However, Prashant Warrier, founder of Lightspeed-backed Qure.ai, said India’s private healthcare market remains very small compared to foreign counterparts. “If you’re only building for India, it’s not a substantial business,” he said.
The US and the UK generate most of the startup’s business, while India accounts for less than 5%.
The Mumbai-based healthtech startup uses AI and deep learning to interpret medical images such as X-rays, CT scans and MRI scans, enabling faster and more accurate diagnoses.
Investors also emphasise the need for unit economics to be healthy from the start.
“Scale will not come to your rescue given limited operating leverage in healthcare. To be successful, deliver clear medical and scientifically proven benefits, delight customers with top-of-the-line experience, stay frugal till product-market fit, and ensure your business model has pricing power and reasonable profits built in,” said Porwal.
