Healthtech funding is recovering from a post-pandemic downturn, with AI helping to drive a new wave of innovation and growth across digital care and digital pharma in Europe. 

AlbionVC is one of the most active health tech investors in Europe, with over £1bn AUM and 20+ healthcare investments including Cambridge’s Arecor Therapeutics, Healios and Oviva. For the third year running, AlbionVC has mapped the sector and its insights give an idea of how healthtech is evolving. 

Some key stats:

• Over the last three years, digital health has received over €5.2bn in funding across digital pharma (€1.1bn) and digital care (€4.1bn) 

• Since 2022, there has been a 37% increase in the number of digital care startups and 50% growth in the number of digital pharma startups

• Diagnostics and clinical decision support has seen the highest increase in digital care investment, likely driven by AI, with over 55% of these companies at very early stage 

• While healthtech funding hasn’t reached the same levels as the Covid-fuelled boom we saw in 2021, the amount invested to date in 2023 is back to 2020 levels

• The market is showing signs of maturing - fewer seed companies are raising, yet there are bigger rounds than in 2020. This could be because of more attractive companies with higher growth opportunities and VCs having large pools of capital and chasing fewer deals. 

• Big rounds were raised in 2023 by companies in digital care such as Corti.ai (€57m), AlbionVC portfolio company Peppy Health (€42m), and in digital pharma with Causaly (€57m) and Charm Therapeutics (€19m)