What is the latest update in the digital health market?

The digital health market is moving fast, and Q1 2026 brought major policy wins, large fundraising rounds, and category-defining acquisitions.

We constantly update this blog post so you always have the freshest picture of what is happening in the digital health market right now.

And if you want to better understand this new industry, you can download our pitch covering the digital health market.

Summary table of the most important updates in the digital health market

We define the digital health market as products and services that use digital technology to deliver, support, or improve health care and health outcomes.

We include telehealth/virtual care, remote monitoring and connected devices, health IT and clinical workflow software, and patient-facing mobile apps when they are health-focused.

We exclude generic enterprise IT, purely consumer fitness/wellness products with no health use case, and biotech/lab R&D tools unless they directly power care delivery or clinical decision-making.

You can also get all the latest market news for the month here.

Piece of News	Category	Date	Source
Congress extended Medicare telehealth flexibilities for two more years	Regulations & Policies	February 3, 2026	ATA
Verily raised $300M and Alphabet became a minority investor	Fundraisings	March 19, 2026	Verily
Universal Health Services agreed to acquire Talkspace for $835M	M&A	March 9, 2026	Talkspace
OpenEvidence raised $250M for clinical AI used by doctors	Fundraisings	January 21, 2026	Business Wire
FDA issued final guidance on clinical decision support software	Regulations & Policies	January 29, 2026	FDA
Doximity reported $185M quarterly revenue with 60% EBITDA margin	Financial results	February 5, 2026	Doximity
Garner Health raised $118M at a $1.35B valuation	Fundraisings	February 10, 2026	PR Newswire
Quantum Health acquired CirrusMD to add virtual care to navigation	M&A	March 3, 2026	Quantum Health
Stryker launched its SmartHospital Platform for hospital-wide digital operations	New tech and infrastructure	March 9, 2026	PR Newswire
Quantum Health launched an agentic AI platform for healthcare navigation	Product launches	January 20, 2026	Business Wire
BetterHelp became exclusive online therapy provider for AARP members	Partnerships	March 10, 2026	Teladoc Health
Wisp acquired TBD Health to launch hybrid and enterprise care offerings	M&A	January 27, 2026	Business Wire

How is the digital health market doing now?

How do we define the digital health market?

We define the digital health market as products and services that use digital technology to deliver, support, or improve health care and health outcomes.

We include telehealth/virtual care, remote monitoring and connected devices, health IT and clinical workflow software, and patient-facing mobile apps when they are health-focused.

We exclude generic enterprise IT, purely consumer fitness/wellness products with no health use case, and biotech/lab R&D tools unless they directly power care delivery or clinical decision-making.

This is also the definition we use in our report covering the digital health market.

How big is the digital health market in 2026?

The digital health market is worth approximately $430 billion in 2026, with a working range of $380 billion to $480 billion depending on how broadly you draw the boundaries.

This is not a random guess, if you want to know how we have come up with this estimate, you can read our digital health market size analysis here.

To put that number in perspective, the digital health market is roughly the same size as the global cybersecurity market and the global cloud infrastructure services market, and still represents only a single-digit percentage of the $9.8 trillion global health spending total.

The digital health market scores 55 out of 100 on maturity (core infrastructure exists but next-generation capabilities are still being built), 85 out of 100 on competitiveness, and 75 out of 100 on fragmentation, with a few giants in core health IT and a very long tail of smaller players in apps, monitoring, and specialty tools.

How fast will the digital health market grow in the future?

The digital health market is expected to grow at roughly 16% per year (CAGR) from 2026 to 2036, which sits in the middle of published forecasts after adjusting for different definitions and time horizons.

At that pace, the digital health market should reach about $779 billion by 2030 and approximately $1.9 trillion by 2036, making it about 4.4 times bigger than it is today.

That 16% growth rate is faster than most mature enterprise software segments but slower than brand-new consumer internet categories at their peak, and it is similar to other regulated transformation markets like fintech infrastructure and cybersecurity.

What does current funding activity look like in the digital health market?

Our team, who continually updates our digital health market pitch deck, is keeping a close eye on the market and tracking key signals.

One of those signals is fundraising activity across startups. Each month, we refresh this page with a list of startups of the digital health market that have raised funding, and we also publish a quarterly analysis here.

Is funding momentum accelerating or cooling in the digital health market these days?

Q1 2026 saw several very large digital health funding rounds, including Verily's $300 million raise and OpenEvidence's $250 million round, continuing the momentum from 2025 when total digital health funding reached $14.2 billion (up 35% from 2024).

Compared to Q1 2025, the trend is clear: money is still flowing into the digital health market, but it is concentrating in fewer, larger rounds rather than spreading across many smaller deals.

Average deal sizes are growing because investors are backing companies with proven clinical adoption and clear revenue models, while earlier-stage startups face a tougher fundraising environment.

Which categories and business models are attracting capital in the digital health market?

These categories and business models of the digital health market are receiving important fundraising currently:

• Clinical AI and decision support: OpenEvidence raised $250 million for AI tools already embedded in physician workflows, showing investors want clinical AI with real adoption.
• Precision health and AI platforms: Verily raised $300 million to advance its precision health AI strategy, attracting capital even while restructuring its ownership away from Alphabet.
• Healthcare cost and quality optimization: Garner Health raised $118 million at a $1.35 billion valuation for its provider-ranking and incentive platform, proving that cost reduction stories still resonate with investors.

The common thread across Q1 2026 digital health fundraising is clear: investors are backing companies that can show measurable clinical or financial impact, not just engagement metrics.

Who's writing the most checks in the digital health market?

These investors are being very active when it comes to fundraising in the digital health market:

• Series X Capital led Verily's $300 million round, backing one of the largest digital health AI platforms as it transitions to independent ownership.
• Growth-stage venture firms are concentrating capital in clinical AI companies like OpenEvidence, where proven doctor adoption reduces investment risk.
• Late-stage investors continue to back employer-facing digital health platforms like Garner Health that can demonstrate measurable cost savings for healthcare buyers.

The investor pattern in Q1 2026 confirms that digital health capital is flowing toward platforms with proven distribution and measurable outcomes, not early-stage experiments.

Any big acquisitions or IPOs in the last three months in the digital health market?

These are the big acquisitions and IPOs that happened recently in the digital health market:

• Universal Health Services agreed to acquire Talkspace for about $835 million, combining Talkspace's virtual platform and 6,000-provider network with UHS's broader behavioral health footprint.
• Quantum Health acquired CirrusMD to add physician-led virtual care directly into its healthcare navigation platform, so members get care faster and in lower-cost settings.
• Wisp acquired TBD Health to move beyond pure virtual care and launch enterprise and hybrid care offerings at scale.

All three acquisitions point in the same direction: digital health buyers want platforms that combine virtual and in-person care, not standalone telehealth products.

How are companies in the digital health market performing overall?

We are watching this market everyday, because we need to constantly update our pitch deck. Here is a couple of things we have noticed.

Are there any standout success metrics or financial results in the digital health market?

Yes, Q1 2026 brought strong proof that digital health companies can be both useful and highly profitable:

• Doximity reported $185.1 million in quarterly revenue, up 10% year over year, with a 33% net income margin, a 60% adjusted EBITDA margin, more than 1 million quarterly active prescribers, and over 300,000 users of its AI products.

Doximity's results are a reminder that durable margins exist in digital health when a product is embedded in daily clinician workflows.

Have there been any major partnerships in the digital health market?

Yes, Q1 2026 saw two notable partnerships in the digital health market:

• BetterHelp became the exclusive online therapy provider for AARP members, opening a large distribution channel into adults aged 50 and older, a demographic that digital mental health platforms have historically underserved.
• Sibel Health and LookDeep Health partnered to combine continuous vital signs monitoring with real-time bedside AI, targeting emergency departments, inpatient units, and hospital-to-home transitions.

Both partnerships show that the digital health market is moving toward multi-product combinations and trusted distribution channels rather than standalone launches.

Have there been any notable technology or infrastructure breakthroughs in the digital health market?

Yes, Q1 2026 brought two notable technology and infrastructure developments in the digital health market:

• Stryker launched its SmartHospital Platform, a digital foundation designed to connect devices, data, and care teams across the entire hospital, signaling that large medtech companies are pushing deeper into software and hospital infrastructure.
• Quantum Health introduced an agentic AI platform for healthcare navigation, combining AI, provider steerage, and human coordination to automate actions across healthcare journeys.

These launches show that digital health technology is moving from answering questions to actually doing work inside clinical and operational workflows.

Have any companies restructured or shifted pricing or business model in the digital health market?

There were no major restructurings or business model shifts reported during Q1 2026 in the digital health market, though several acquisitions (like Wisp acquiring TBD Health) represent strategic pivots from pure virtual care to hybrid models.

Are there any other notable wins or successes in the digital health market?

Yes, one more win worth highlighting in the digital health market during Q1 2026:

• Verily secured $300 million and restructured its ownership so Alphabet becomes a minority investor, giving Verily more independence while still attracting serious capital for its precision health AI strategy.

Verily's ownership reset is a notable win because it shows that large digital health AI platforms can attract outside capital and stand on their own.

What is the overall sentiment in the digital health market right now?

Are there any notable recent opinion pieces, thought leadership about the digital health market?

Yes, one important opinion piece stood out in Q1 2026:

• Rock Health warned that patients are adopting health AI faster than the healthcare system can keep up, based on a survey of 8,000 U.S. adults showing consumers are already arriving at clinical visits informed by AI tools, while provider workflows and system readiness lag behind.

This insight matters because it suggests demand for digital health AI tools may outpace what hospitals and clinics are prepared to support.

Are there any interesting and recent market research reports about the digital health market?

Yes, one major market research report set the tone for Q1 2026:

• Rock Health published its 2025 year-end digital health funding overview, reporting that U.S. digital health startups raised $14.2 billion in 2025, up 35% from 2024 and the highest total since 2022, but with money flowing to fewer companies and larger rounds.

Rock Health's report confirms that the digital health funding market is healthier but more selective, rewarding a narrower set of winners.

Have there been any regulatory changes, policy updates, or new compliance requirements in the digital health market?

Yes, Q1 2026 brought two important regulatory updates for the digital health market:

• Congress extended key Medicare telehealth flexibilities for two more years, meaning Medicare patients can receive non-behavioral telehealth at home through December 2027, removing a major policy cliff for the entire digital health market.
• The FDA issued final guidance on clinical decision support software, clarifying which CDS functions fall outside device regulation and giving digital health builders and investors clearer rules for product design and compliance.

Both regulatory updates reduce uncertainty, which is one of the biggest risks for builders and investors in the digital health market.

Who is the author of this content?

NEW MARKET PITCH TEAM

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