This is a guest post by Anastasia Sysoeva, Product and Strategy Lead in the neurotechnology space. She has led the development of EEG-based systems for real-time emotional feedback and personalized cognitive training, focusing on defining product direction and turning neuroscience into scalable, user-centric solutions across wellness and сognitive performance.
The first half of 2024 proved that HealthTech is far from slowing down. Capital continues to flow, with funding holding steady at $4.0–$4.5 billion per quarter — already above pre-pandemic levels. The money is there, but founders can no longer rely on vision alone. To secure capital, they need to understand exactly what investors expect and how to shape their pitch to meet those demands.
Much of the current momentum is driven by AI, fueling everything from diagnostics to digital health platforms and drug discovery. Yet the bar has been raised. Investors are no longer satisfied with big ideas or impressive prototypes — they want proof. Startups must demonstrate that products can deliver measurable outcomes in real clinical environments, navigate regulatory pathways, and show a clear path through reimbursement systems.
For founders preparing to raise in HealthTech or Digital Health, this is the new reality. Drawing on my own fundraising experience in the sector and dozens of conversations with investors, I’ve identified the patterns shaping capital flows in 2024. The lessons are clear: understand the new investor lens, position evidence at the core of your story, and treat regulatory readiness as a competitive advantage. This article lays out the playbook on what the first half of 2024 revealed about funding, innovation, and investor expectations — and how startups can apply those insights to raise smarter in late 2024 and into 2025.
HealthTech funding landscape in H1 2024
The first half of 2024 made one thing clear: early-stage deals are back in the spotlight. Seed rounds accounted for 42% of all transactions — nearly double their share just a few years ago. Investors are still eager to back fresh ideas, but they’re far more selective about where the money goes. For founders, the message is simple: early capital is there, but you need to stay lean, show a credible path to validation, and prove efficiency from day one.
No surprise, artificial intelligence is driving much of this momentum. AI captured 58% of all U.S. digital health investment in the first half of the year. The biggest checks flowed into oncology, diagnostics, mental health, and healthcare operations. Among the headline deals: Tempus went public in a $411M IPO, Formation Bio raised $372M in Series D, and Abridge secured $250M at a $2.5B valuation.
Europe had its moments, too. Paris-based Bioptimus closed a $35M seed round—one of the largest for a European health AI startup — to advance its foundation models for biology and precision medicine. Fellow French player Aqemia added €30M to its Series A to scale its quantum physics–driven generative AI platform.
The throughline across all these deals is clear: capital flows to startups that pair deep technical strength with undeniable adoption potential.
The AI factor and what’s next for 2025
In 2024, artificial intelligence is the engine behind some of the biggest advances in HealthTech — driving progress in diagnostics, mental health, oncology, healthcare operations, and even drug discovery. A major shift underway is the rise of AI Services as Software. Instead of simply helping people complete tasks faster, these platforms are doing the work themselves: drafting clinical notes, auditing claims, managing pharmacy operations. By selling outcomes rather than tools, they are tapping into larger budgets and sidestepping the drawn-out adoption cycles that have historically slowed healthcare software. Early results suggest these models scale faster than traditional SaaS, with shorter sales cycles and accelerated growth.
Looking ahead to 2025, several themes are coming into focus.
- Payer administration is at the top of the list: insurers under pressure to cut costs will turn to AI-first solutions for claims processing, benefits navigation, and cost management — opening the door for startups to replace legacy outsourcing models.
- Drug pricing transparency is another area gaining traction, as rising therapy costs and regulatory scrutiny create demand for compliance and visibility tools in an underserved market.
- AI-powered clinical support is poised to act as a co-pilot for physicians, helping with triage, symptom tracking, and risk stratification. The real opportunity will be for startups that integrate seamlessly into existing workflows, solving the core provider challenge of doing more with fewer staff.
- Value-based care infrastructure will rise in importance as CMS pushes more patients into risk-based models, creating demand for platforms that capture data, manage contracts, and demonstrate outcomes. Startups that build this backbone will be indispensable in the transition to outcome-based reimbursement.
Taken together, these shifts mark a clear turning point. HealthTech is no longer about digitizing existing processes — it is about redesigning entire workflows with AI at the center. The companies that can prove real outcomes, earn trust, and scale efficiently will be the ones leading the next wave of growth in 2025 and beyond.
Real-world challenges – startup survival guide
The big themes shaping HealthTech today translate directly into the obstacles that determine who gets funded. Regulation is now the first and most visible hurdle. Both the FDA and EU regulators expect startups to present clear validation pathways and real-world evidence, and investors are probing these questions earlier than ever. Reimbursement is just as critical. Without a credible case for how your product drives measurable savings or outcomes for insurers, providers, or pharma, adoption will stall regardless of the technology’s promise.
The FDA’s new guidance on AI and machine learning has put explainability and real-world validation at the center of the conversation, while Europe remains strict on MDR and GDPR. For founders, this means regulatory planning is no longer a late-stage task. Even at the seed stage, being able to articulate whether you’re pursuing a 510(k), De Novo, or CE mark adds credibility to the fundraising story.
Beyond regulation, two issues now dominate the investor lens. Reimbursement has become a make-or-break factor, shifting the investor question from “how advanced is the tech?” to “who pays for this, and why?” At the same time, data privacy has evolved from a compliance checkbox into a brand advantage. Startups that embed security and transparency directly into the product experience—with features like user control, anonymization, and even branded privacy frameworks—are earning trust faster and standing out in crowded markets.
The financing environment itself has also changed. Bridge and down rounds have pushed founders to tighten operations, and investors now reward those who can extend runway to 18–24 months rather than chase inflated valuations. In this market, efficiency isn’t just survival—it’s a fundraising advantage.
Finally, data governance is emerging as a competitive edge. Companies like Withings show that when privacy is treated as a feature rather than an afterthought, it strengthens market positioning and accelerates adoption.
Founders should anticipate that investors will examine their regulatory pathway, reimbursement model, and data privacy strategy from the very beginning. Demonstrating a well-considered approach to these areas signals maturity, reduces perceived risk, and can turn potential obstacles into clear competitive advantages in the fundraising process.
Fundraising playbook for late 2024 and 2025
For startups planning to raise capital in late 2024 or into 2025, expectations are higher but the roadmap is clear. Investors remain active, but they are selective, prioritizing companies that demonstrate real-world momentum. To stand out, founders should focus on:
- Proof of traction: Show adoption through clinical pilots, early partnerships, or even small but validated payer contracts. These signals prove that your solution can move beyond the lab and into the market.
- Operational discipline: Run lean, maintain realistic burn rates, and secure 18–24 months of runway. Investors reward efficiency and milestone-driven execution over inflated valuations.
- Reimbursement clarity: Tie every innovation to a credible payer pathway — who pays and why — to demonstrate measurable value and ensure sustainable adoption.
- Privacy as a feature: Position data stewardship as part of the product, not a compliance checkbox. Transparency, security, and user trust are now competitive differentiators.
- Right-sized fundraising: Structure your round around the next clear inflection point, not vanity metrics. Capital should align with hitting proof points that unlock the next stage of growth.
- Diligence your investors: Research funds as thoroughly as they diligence you. Understand their portfolios, patterns, and strategic value to tailor your pitch and secure partners who bring more than capital.
Investors who stand out today look for discipline, efficiency, and adoption. Founders who can package these elements into a clear and compelling narrative will be best positioned to raise effectively as the market heads into 2025.
Choosing the right investors – what startups should look for
One of the biggest lessons from the first half of 2024 is that not all capital is created equal. In HealthTech, the right investor can make the difference between accelerating growth and stalling when things get complex. Money alone is not enough. HealthTech is not SaaS. The best investors understand clinical realities and bring networks across payers, providers, and pharma. An investor who can open doors to hospital systems or facilitate strategic partnerships delivers far more long-term value than someone who simply writes a check.
This is especially true in the current AI wave. Investors are filtering out hype, looking for explainability, validated use cases, and alignment with health economics. Even the most sophisticated algorithms will not stand out without proven outcomes in a clinical or payer context.
The key takeaway is clear: fundraising is not a one-way evaluation. Founders should diligence their investors as carefully as investors diligence them. Doing the research ahead of a pitch, understanding a fund’s portfolio and priorities, and tailoring the message accordingly are essential. Once an investor is on your cap table, they are there for the long run. Choosing partners who provide not just capital but a strategic advantage in scaling within healthcare is critical.
Positioning for 2025
The first half of 2024 confirmed HealthTech’s resilience. Early-stage funding remained strong, AI dominated the agenda, and major deals showed that investor appetite is still there. But in 2025, the focus will shift from vision to execution. The companies that succeed will be those that turn AI breakthroughs into real adoption, embed trust into both product and data strategy, and prove measurable value for payers and providers.
Regulation and reimbursement will no longer be hurdles to clear at the end of the process but integral parts of the business model from the start. HealthTech is entering a phase where discipline defines success. Startups that pair innovation with efficiency and outcomes will not only secure funding — they will set the pace for the next wave of growth.
