Digital health startups raised $4 billion in venture capital funding in the first quarter of 2026. This was an increase of $1 billion from the same period last year and the strongest first quarter since the peak of the pandemic.
In the first quarter of 2025, digital health companies raised $3 billion in 122 deals, compared to 110 this year. The average deal size rose to $36.7 million, the highest average deal size Rock Health has recorded in a single quarter since Q4 2021, according to the company’s Q1 Digital Health Funding Summary Report.
As venture capital investors bet on artificial intelligence-enabled startups, capital is concentrated in a few mega-deals, in line with a trend from last year.
Just 12 companies received a huge share of capital, representing 59% of total quarterly funding, with funding deals of $100 million or more. Wearable maker Hoop recently raised $575 million in a Series G round and is reportedly aiming for an IPO. OpenEvidence has raised $250 million in a Series D round, its third round in less than a year. And Verily took home $300 million when it left Alphabet.
Among more than a dozen big deals in the first quarter, telepsychiatry provider Talkiatry landed a $210 million Series D. eMed, an employer-focused telemedicine platform, has raised $200 million in Series A funding. Hybrid mental health provider Grow Therapy has raised $150 million. Value-based care support company Honest Health wins $140 million. Patient advocacy platform Solace has raised $130 million in Series C funding.
Top deals in the first quarter included Qualified Health, which secured $125 million in funding; Garner Health, a digital care navigation company for employers, won $118 million. Cognito Therapeutics’ $105 million pickup. Midi Health, a women’s healthcare provider, has raised $100 million, reaching “unicorn” status.
The Rock Health report outlines some of the key trends shaping digital health financing as AI becomes a bet.
“Companies that are successful in raising funding are the first to tackle use cases that incorporate complex workflows, from Doctronic’s prescription pilot in Utah to OpenEvidence’s integration with health system EHRs,” Rock Health researchers Ashwini Nagappan, Madelyn Knowles, and Jason Lei said in the report.
Rock Health researchers note that direct-to-consumer models continue to expand with a new wave of AI-native consumer platforms.
Rock Health’s report notes that more investors are backing DTC companies, supported by a number of tailwinds, including clearer FDA guidance on low-risk wellness products, extended telemedicine flexibility through 2027, and growing confidence in meeting the needs of increasingly active consumers.
In the first quarter, DTC companies invested heavily in Super Bowl advertising, and the market expanded distribution channels through efforts like TrumpRx. Companies also accelerated their D2C strategies, with Maven Clinic launching a direct-to-consumer platform.
Additionally, AI companies are moving into healthcare with new AI capabilities that act as gateways to care, such as OpenAI’s ChatGPT for Health, Anthropic’s Claude for Healthcare, and Perplexity, an AI-powered health data search and answer engine.
Rock Health researchers also point to policy tailwinds driving the digital health market. CMMI’s ACCESS model payment rates began in February. Nearly every major payer in the country has also signed a pledge to extend this model to Medicare Advantage, Medicaid, and commercial markets. HHS is focusing on improving interoperability and data access through the Health Tech Ecosystem Initiative, while strengthening information blocking enforcement.
Looking at the exit market, Rock Health researchers note that the IPO window remains narrow. There are several companies that the market is paying attention to, including smart ring manufacturers Oura, Aledade, Included Health, Maven Clinic, Virta, and Zelis.
M&A is a mixed bag, with 43 digital health-related deals in the first quarter of 2026, up slightly from 30 in the previous quarter, according to Rock Health.
“The first quarter of 2026 shows that the market is active but selective. For organizations operating in an environment where AI is table stakes, expectations are shifting around how care is accessed and delivered. And the remainder of this year will reveal how much of the momentum will continue and where it will be temporary,” Rock Health researchers wrote.
