European digital health startups raised nearly €4.86 billion in 2022 (including €1.7 billion in France, nearly three times the €577 million invested in 2021). The level of European investment has therefore continued to grow in 2022, albeit in a more measured way than between 2020 and 2021. 301 deals were closed, representing a 22% YoY increase in total financing. There are now +1000 companies active in digital health across Europe today.
It is worth nothing that the level of investment in the US in digital health has dropped significantly, while Europe has been more stable in 2022.
Given the boom in the European digital health sector, for the third year in a row, Karista published its third edition of the European mapping of digital health funds (known as "e-health"). This is a unique mapping in Europe destined to evolve and it will be updated over the months.
Our goal is to be fully exhaustive, but it is always possible that we omitted some players in the mapping. If you want to inform us of any change to be made, please fill in this form.
• How do we define the Digital Health sector?
This sector brings together companies belonging to the field of health in its broadest meaning (going from prevention/wellness to digital therapy) and which developed a software or digital technology as a differentiating factor.
• We included in this mapping all the funds with a global headquarter in France, Germany, Spain, Italy, United Kingdom, Netherlands, Austria, Luxembourg, Belgium and Nordics.
• Based on public information (websites), we selected all the funds that invested (at least) in 3 companies belonging to the Digital Health sector in Europe.
• “Late stage” refers to B and following series.
• This year, the Corporate fund category prevails on the others.
• Super investors are those who have invested in more than 10 digital health companies.
• The digital health investment sector continues to grow in 2022 in Europe. Overall, the average amount of European fundraising increased (reaching an average of €20M vs. €17M in 2021) with a trend of valuations returning to pre-pandemic levels. Indeed, the correction in private market valuations is correlated to the state of listed markets, which faced through turmoil in 2022.
•This year, we added Nordic funds to our mapping. Indeed, Sweden, Denmark, and Finland are included in the mapping for 7 active funds, 40% of which are multi-stage and 60% early-stage.
• 168 funds invested in European e-health (invested at least in 3 companies until Q4 2022) are included in the mapping, vs. 143 in 2022. This increase (+17.5%) is driven by French investors for a total of 47 funds that invested in digital health in 2022. On a like-for-like basis, the total number of funds (excluding Nordic) is: 161 (+12,6%).
• 52% of the funds active in digital health are investing in early stage, i.e. 88 funds. Most of the new funds - that joined the 2022 mapping - are themselves investing in seed stage. However, we have seen new entrants in the later stages where multi-stage players have increased, representing 37% of investors (+47.6%). This is consistent with the maturity of the sector.
• Regarding the geographical distribution, the main trio in terms of number of funds remains the same as in the last two years: France (28%) / United Kingdom (20.2%) / Germany (19.6%) followed by the Netherlands, i.e., +4 active funds in digital health. That said, France has this year overtaken the UK as the leading European country with a +38% YoY growth in cumulative amounts raised, reaching €1.79 billion in funding. The largest financing rounds in 2022 were carried out by French companies: Doctolib, Alan, or DNA Script.
• While there were no IPO in the European digital health ecosystem in 2022, M&A activity increased by 1.7x during the year. Industry consolidation is intensifying, and 60% of global acquisition activity is related to digital health players. The fundraising’s slowdown of driving acquisitions.
• Finally, given the slowdown in the number of new active funds entering this mapping, despite a sustained investment momentum, we considered the investors who are persisting and continuing to finance this young e-health sector. These "super investors" in e-health, having invested in more than 10 companies, number 31 funds. Nearly 55% of the "super investors" are early-stage investors. However, it should be noted that among them, there are large funds which, by the total number of deals they have made, all sectors combined, are present in this category.
"2022 saw still an increasing in the total amount raised by European Digital Health startups, and also in the number of active funds, but less than previous years. That’s precisely the reason why, in this edition, we tried to figure out which funds are persisting and called them "super investors" to follow, from now on, those with more than 10 deals!"
- Catherine Boule, Managing Partner at Karista