Digital health startups raised $7.4 billion in the first half of the year, up from $6.4 billion in the first half of 2025, according to data published this week by Rock health.
There were 244 deals in the first half of 2026, a total of 245 for the first half of last year, but capital is flowing into fewer, bigger bets. Megadeals, meaning those worth $100 million or more, accounted for 45% of all financings in the first half of this year. This concentration means that around 8% of deals have taken up almost half of the money invested in the sector.
The median deal size also reached $14 million, the highest since 2022 — another sign that investors are writing bigger checks to fewer companies rather than spreading their bets.
Mental health retained its title as the most funded clinical category for the seventh year in a row, but weight management is creeping in. The category ranked second, propelled by the continued boom of GLP-1 and platforms like Medical, To feed And Midi Health expand into this space.
Among all mental health and weight loss startups that raised money in the first half of the year, nearly two-thirds sell directly to consumers, compared to just 29% of all digital health companies, Rock Health’s report notes. This gap reflects the extent to which unmet consumer demand is driving investment in these two categories.
Perhaps the most telling change is qualitative rather than quantitative: the report also notes that AI has become so pervasive in the sector that it no longer functions as a significant differentiator in its own right.
Investors are increasingly asking not who owns AI, but who owns something that AI alone cannot replicate. They focus more on founder expertise, platform ownership, hands-on implementation support, and strategic partnerships as sources of competitive advantage.
Mary Minno, co-founder of a healthcare venture capital platform Hub Treenoted that there has been a “fundamental shift” in what it takes to build a strong healthcare business.
“Previously, founders had to overcome a significant hurdle to create a product: designing, designing, deploying and maintaining software. But AI has changed that. Now you can design, design, deploy and maintaining software using words. So the gap is no longer technological, but rather the learned secrets that industry players have about their field,” she explained.
In his eyes, “there has never been a better time” to build the digital health space.
The pace of AI adoption in the industry – from all stakeholders, including providers, payers, medical device and pharmaceutical industries – is increasingly attracting investor attention, Minno noted. She said she expects funding to increase even more as the year goes on.
So far, the financing data matches that of the market.
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