MobiHealthNews asked executives from across the digital health landscape to look into their crystal balls and closely examine how digital health investments will materialize in 2025.

The exec highlighted how AI and data, return on investment, sustainability, merger and acquisition activity, and the administration's choices for HHS, CMS, and the FDA may influence the everchanging funding environment. 

Amit Khanna, senior vice president and general manager of health at Salesforce

In the rapidly evolving landscape of digital health, funding is expected to increase significantly, particularly in the areas of AI and data. 

Companies within the health tech industry are poised to revolutionize traditional business processes by leveraging AI technology to drive efficiency and improve patient engagement through innovative modalities. As a result, we can anticipate a rise in investments from large enterprises and venture capital firms in health tech companies that harness the power of AI to drive innovation and improve patient outcomes.

Neil Patel, head of new ventures at Redesign Health

I'm tracking early indicators of a new wave in seed and pre-seed funding, particularly around AI applications. The interesting shift is in capital efficiency–these startups are leveraging AI tools to achieve what previously required millions in development costs. We're seeing companies hit significant milestones with far less capital.

Ellen Rudolph, cofounder and CEO of WellTheory

Investors will begin making bets on women’s health outside of just reproductive health. Despite making up half of the population and driving the vast majority of healthcare decisions, just 3% of digital health funding was focused on women’s health between 2011 and 2020, and a majority has gone to startups addressing fertility, pregnancy and motherhood, according to Rock Health. 

There are a number of other chronic conditions that disproportionately impact women across the lifespan (cardiovascular conditions, menopause and autoimmune disease, to name a few).

I expect we’ll see continued investment in women’s health across the lifecycle into 2025.

Don Woodlock, head of global healthcare solutions at InterSystems

"AI-washing" will be called out, and companies with vague AI strategies will struggle to secure funding.

I anticipate continued growth in digital health funding, potentially surpassing pre-pandemic levels but with increased investor scrutiny. The momentum from 2024, fueled by AI-powered solutions and Series A investments, suggests a healthy appetite for innovation. However, the impact of the 2023 downturn will likely lead investors to prioritize sustainable growth and profitability, favoring proven solutions. 

So, it is no surprise that AI will remain a funding priority, but investors will be mindful if AI is delivering real-world results or just exaggeration, aka "AI-washing." Meanwhile, any industry consolidation, especially in digital therapeutics and telehealth, will cause a shift towards mature, integrated offerings.

Anu Sharma, founder and CEO of Millie

I think 2025 will be a bit of a “wait and see” year. 

On the one hand, nobody really knows what to expect from the Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS), or the Food and Drug Administration (FDA) picks as the Trump administration takes office. 

On the other hand, we seem to be turning the corner on venture capital activity after a two to three-year drought, where few deals outside AI were getting done. Healthcare investment activity was especially impacted. But valuations have since corrected and capital is slowly flowing again. We may even see an IPO for Maven. 

Overall, I am cautiously optimistic that 2025 will be a better year for digital health. 

Tamar Samuels, cofounder and VP of Culina Health 

We spend a lot of time with our investors, one of whom is a payer. Our intel indicates that many digital healthcare companies aren't going to survive, and when they all fall away, those that are left standing SHOULD have an easier time fundraising in 2025. We saw a surge in these companies after the pandemic, but for many different reasons, they didn't make it through. We are confident in Culina Health's positioning to be able to secure more financing when appropriate due to continued growth and reduction in opex [operating expenses] spending.

Karl Ulfers, CEO and cofounder of DUOS

We are not returning to 2019 through 2021 anytime soon! That being said, I think the digital health market will improve for two reasons:

1. The current administration is likely to increase privatization and likely to decrease the headwinds that payers have to navigate. The end result of this will be stronger, more stable balance sheets. The result of that will be an increase in merger and acquisition activity of digital health companies.

2. The result of this merger and acquisition activity will be some much-needed wins for digital health investors which will result in increases from an investment perspective. 

Brooke Boyarsky Pratt, CEO and cofounder of knownwell 

I’d expect funding markets to continue to improve as economic uncertainty reduces, the fed rate reduces, and capital holders are sitting on a lot of dry powder that they need to deploy.

Hal Andrews, president and CEO of Trilliant Health

The history of venture capital suggests that a sector that undergoes numerous failures falls out of favor with investors, and the digital health sector has seen more than its share in the past three years, with Forward as the most recent example.

Dan Nardi, CEO of Reimagine Care

Return on investment and sustainability will continue to be a focus for digital health companies in 2025. It does not matter if you are selling to providers, payers or employers; the ability to prove an economic return on investment for customers will continue to be critical for adoption and scaling and for investors to see long-term value in these investments. Additionally, the focus on unit economics and sustainability is here to stay. Gone are the days of "grow at all costs," and now there is a much greater focus on growing profitably and sustainably over the long term.