Health Tech Venture Capital Investment Surges in 2025
This revival is marked by a 12% increase in the number of deals, and an average deal size reaching $7.7 million, reflecting a robust market interest in the sector. Despite this growth, no major health tech IPOs occurred in Q3 due to policy uncertainties, and no significant listings are expected for the rest of the year… No significant health tech listings are expected for the remainder of 2025.
In 2025, health tech venture capital investment experienced a significant resurgence, with funding through the third quarter surpassing the total from the previous year. This revival is marked by a 12% increase in the number of deals, and an average deal size reaching $7.7 million, reflecting a robust market interest in the sector.
AI Tools Drive Larger Funding Rounds
The increase in health tech investment can be attributed largely to the integration of AI tools, which are driving larger funding rounds. Many startups in the sector are focusing on developing practical AI products, which has attracted substantial investor interest. Despite this momentum, there were no major health tech IPOs in the third quarter, with policy uncertainties influencing decisions regarding public listings. No significant health tech listings are expected for the remainder of 2025.
Legal Tech Sees Breakout Year
Legal tech also saw a notable surge in venture capital funding, reaching $3.2 billion in 2025. This funding has fueled startups specializing in contract review and analytics, leading to a breakout year for the legal tech sector. There has been an increased demand for innovation teams and training, exemplified by significant funding rounds such as Legora's $150 million in Series C funding and Eudia's $105 million in Series A funding. Other notable funding rounds include Bench IQ and Casium, each raising $5 million in seed funding, Covenant securing $4 million for its AI-native law firm, and Marveri emerging with $3.5 million in funding.
Notable Funding Across Various Sectors
Total funding for the week amounted to $6.4 billion, with Adaptive Security securing $81.0 million, bringing its total funding to $136.0 million. Aeovian Pharmaceuticals raised $55.0 million, totaling $142.0 million in funding. Chai Discovery received $130.0 million, increasing its total to $230.0 million, while Clarity Pediatrics obtained $14.5 million, bringing its total funding to $24.5 million.
In other sectors, Databricks received a substantial $4.0 billion funding round, while DataLane raised a total of $22.5 million in equity funding. Echo secured $50.0 million in total equity funding, with FINNY and Fluency raising $21.8 million and $41.0 million respectively. Other notable figures include Mythic with $289.7 million, Nirvana Insurance with $262.2 million, Octane at $352.9 million, Orreco at $12.2 million, and PolyAI with $202.0 million in total equity funding.
Continued Investment Despite IPO Hesitation
The absence of major IPOs within health tech does not seem to have dampened venture capital interest, as evidenced by the continued flow of investments across both health and legal tech sectors. The focus on AI-driven solutions and innovations is a common thread among the top-funded companies, suggesting a strategic shift towards leveraging technology to address industry-specific challenges.
As the year progresses, the health tech and legal tech sectors are likely to continue evolving, driven by the demand for innovative solutions and increased investment activity, albeit with a cautious approach towards public offerings amid ongoing policy uncertainties.