AI Startups Drive Increase in Digital Health Funding in H1 2025

The U.S. digital health sector has seen a notable increase in funding, reaching $6.4 billion in the first half of 2025. This is an uptick from $6 billion during the same period in 2024 and $6.2 billion in 2023. A significant portion of this funding surge is attributed to AI-focused startups, which accounted for 62% of the total investments.

Funding Landscape and Transactions

During the second quarter of 2025, digital health firms raised $3.4 billion, contributing to the overall increase in funding. Since the first quarter of 2023, the average quarterly funding has been approximately $2.6 billion, showing a robust growth trajectory in recent times. In terms of transactions, there were 245 deals completed in the first half of 2025, a slight decrease from the 273 transactions recorded in the first half of 2024.

The average deal size has also seen growth, increasing to $26.1 million, compared to $20.4 million last year. Specifically, AI firms raised on average $34.4 million per round, while non-AI firms secured an average of $18.8 million per round. This reflects a growing investor confidence in the potential of AI technologies within the digital health space.

Mega-Rounds and Mergers

In the first half of 2025, there were 11 mega-rounds, with nine of these rounds being attributed to AI startups. This trend underscores the increasing interest in AI technologies and their application within healthcare. Additionally, the sector witnessed over 100 mergers and acquisitions deals, a slight decrease compared to the 121 digital health purchases recorded last year.

The venture capital landscape for healthcare technology appears to be rebounding in 2025, with investors focusing on innovative and promising startups. Among these, 14 longevity-focused startups received funding, illustrating a niche but growing interest in technologies aimed at extending human lifespan.

Significant Investments in Longevity Startups

Several longevity-focused startups received substantial funding in 2025. Notably, Insilico Medicine raised $110 million, while Juvenescence secured $76 million in a Series B-1 round. Fountain Life attracted $18 million in a Series B round, Grey Matter Neurosciences raised $14 million, and Circulate Health garnered $12 million in seed funding. Despite these investments, longevity startups often face challenges post-IPO, as evidenced by BioAge Labs' recent public offering on Nasdaq.

Project Prometheus and the Role of AI

Highlighting the increasing role of AI in healthcare and beyond, Jeff Bezos launched a new AI startup, Project Prometheus, which focuses on AI for physical tasks and engineering. The startup, co-led by Vik Bajaj, former CEO of Foresite Labs and co-founder of Alphabet’s Verily, has hired a team of nearly 100 employees, including researchers from OpenAI and Meta. Bezos, who has been actively funding startups since the mid-2000s through Bezos Expeditions, has participated in 115 funding rounds, showcasing his enduring commitment to fostering innovation.

The establishment of Project Prometheus signals a continued interest and investment in AI technologies, which are increasingly seen as transformative across various sectors, including digital health. With such strong backing and expertise, the startup aims to contribute significantly to the evolution of AI applications in engineering and healthcare.

The digital health sector’s upward funding trend in the first half of 2025, driven significantly by AI-focused startups, reflects growing investor confidence and the transformative potential of AI technologies.