Are we underestimating health-tech?

There’s tourists. And then there’s the people who live in the place year round, whether it’s snowing, raining or the sun is shining bright. These people are the lifers. When it comes to health-tech, it appears that I am one of them.

Health-tech attracted lot of the tourist types in the heady years, back in 2020 and 2021. Around 2022, as we know from Rock Health data, it all started to stall out. Funding in the space by the end of 2023 was still significant - at $10.3 billion - but that represents the lowest amount of capital invested in the space since 2019.

The venture market is down for almost every category with the exception of AI, so that’s certainly a factor. But behind-the-scenes, I am also seeing a lot of generalist tech funds moving out of health care, either officially or unofficially (usually in the form of slowly reallocating resources and talent elsewhere). I have also examples of health care funds that can’t raise or have slowed down their pace of investing so they can focus on the existing portfolio. Please don’t ask me to name names. Because I won’t. But trust me that it is happening.