After several uneven years of venture financing, the digital health sector saw an increase in investment during the first quarter of this year.
Digital health startups raised $4 billion in 110 deals during the first quarter of 2026, according to data released Monday by the venture capital fund and strategy group. Rock health. This represents an increase of $1 billion from the $3 billion raised in 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, the highest average size since the fourth quarter of 2021. A wave of 12 megadeals – financings of $100 million or more – largely contributed to this increase.
Wearable device company CRYThe $575 million Series G was the largest deal of the quarter. The following five largest deals were made by a precision health company In truth (300 million dollars), AI-powered search platform OpenEvidence ($250 million), telepsychiatry provider Talkiatry ($210 million), employer-focused GLP-1 clinic Medical (200 million dollars) and mental health startup Cultivate therapy ($150 million).
If this pace continues, this year will end with nearly 50 mega-deals, nearly double last year’s 26.
As for M&A activity, the first quarter saw modest growth. It ended with 43 digital health deals, up from 30 deals in the previous quarter.
Rock Health’s report notes that two of the most notable deals 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: OpenAITorch’s acquisition of the health data startup and AdvancementThe purchase of Tezi, which makes an autonomous AI recruitment agent.
In addition to the 43 M&A deals completed, one new company collapsed during the first quarter. In December, reports emerged that Matt Holt, former managing director and president of private equity at New Mountain Capitalhad left the New York company to start a new business combining five of its health technology portfolio companies in a transaction valued at more than $30 billion. But the agreement collapsed last month due to disagreements over governance and funding.
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 Q1 2026 marked the first quarter that Rock Health stopped differentiating between AI and non-AI startups in its reporting. Almost every digital health startup these days is AI-based in one way or another, so the lines are too blurry for this distinction to carry much weight.
Rock Health also warned that the digital health market will likely remain volatile as broader geopolitical and political uncertainty continues to shape investment decisions.
Shifting federal priorities, evolving health care regulations, and macroeconomic tensions could all influence the direction of capital flows in the coming quarters. In this environment, investors should remain selective, focusing their funding on startups with clear paths to growth and sustainability.
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