Opinion: If there is a digital health bubble, does it really matter for entrepreneurs?
For the better part of the last two-plus years, my colleagues and I at 7wireVentures have been asked as investors if health care — and especially digital health — is in a “bubble.” Though these conversations rarely reach a satisfying conclusion, the attention given to investing bubbles is understandable.
As a sector, digital health has witnessed a litany of record-shattering milestones over the past two years, with tailwinds from the pandemic ushering in an influx of interest that has been long overdue. The sheer number of investors participating in the digital health market grew by 43%. Increased investor focus on digital health led to a monumental $30.7 billion in venture capital funding being deployed in 2021, representing a whopping 107% uptick from 2020 levels. In the last two years alone, average valuations have tripled to $73 million and helped grow digital health unicorns to a cohort of 85 companies. To say the sector is “hot” is an understatement.
