March 02, 2022

Growth and Evolution — 2022 Digital Health Outlook

Digital health experienced a record-making investment year in 2021, with an estimated 541 deals totaling $21.3 billion for startups. With the persistent demand for advanced technology and solutions, the investment outlook in digital health trends shows no signs of slowing even though areas of focus for where the investments are made will continue evolving in the year ahead.

The rapid growth and successes of digital health have drawn traditional investors, providing a surge in funding and activity across various areas. As investors observe and seek out the trends and deals in digital health tech, it’s easy to imagine the pressure for companies and innovators to deliver quick returns that investors are typically used to.


Although the demand for health data and innovation remains universal and attractive, we see five areas affecting investment activity in 2022.


Digital Health Trends Beyond Telemedicine

Perhaps the most notable and necessary innovation spurred by the pandemic has been the adoption of telehealth in nearly all facets of healthcare. Telehealth has become a critical component across patient and research touchpoints from primary care to specialty care to clinical trials. However, with its rapid adoption through the earlier stages of the pandemic, driving an estimated $4.2 billion raised in the first half of 2021 alone, future expectations for telehealth have leveled out. This is prompting investors to consider what telehealth 2.0 will look like in the future while expanding their areas of opportunity.


Solving for the Chronic and Wide-Spread

One such opportunity may include investing in areas of pervasive or chronic diseases, tackling otherwise costly conditions like diabetes, heart disease, or women’s health issues. For example, adapting telehealth to help treat and manage chronic conditions opens avenues that could decrease the burden on healthcare systems, like reducing the $216 billion per year that heart disease and stroke currently cost the U.S healthcare system. Focusing attention and investment to tackle conditions such as heart disease and stroke, which kill 877,500 Americans each year, could significantly move the needle with global implications. Additionally, leveraging digital health for conditions that are complex or costly to treat, such as certain types of cancer, can also significantly impact patient outcomes.


Wearable Health Tech Investments Continue to Grow

By investing in wide-reaching conditions and population health, the power of data can very much be put into the patient’s hands (or on their wrist). Deloitte estimates the demand for wearable health tech to increase from 320 million units shipped to customers in 2022 to a staggering 440 million units shipped by 2024. The value and investment in wearables can easily be spotted through activity by major players like Google (acquiring Fitbit for $2.1 billion) and Best Buy (acquiring Current Health for $400 million).


The Demand for Connected Healthcare Data

Between consumer wearables, clinical trials, and institutional use, the demand for health data will continue to grow. However, the main difference for adopters and investors alike will be the degree of connectedness (and privacy and security) that health tech can provide. In 2022, blockchain is expected to be a continued focus in healthcare as decentralized data remains a hot area of discussion in innovation and investment communities. But bridging the clinical and the consumer is likely where data and technology activity will be headed in the years to come, standing to lower barriers to care even further.


The Power of Automation and AI in Mental Health

One area that continues to stand out in terms of investments in digital health, particularly throughout the pandemic, has been the mental health space. Raising $3.1 billion last year alone, mental health was the top-funded therapeutic focus in 2021. As the adoption of digital health evolves in mental health, emerging tech is focusing on gaining efficiencies, increased relevance at scale as well as quicker access to support through the power of automation and artificial intelligence (AI). While meditation, wellness, or virtual therapy may typically come to mind when we think of digital mental health tech, incorporating AI or natural language processing (NLP) offers an opportunity to augment clinical support and intervention in novel ways.


Looking Ahead to 2022 Digital Health Investment Strategies

Bayer G4A is looking ahead to the digital health trends outlined above. Our scouting mission will focus on addressing gaps in mental health and cardiometabolic disease through digital health solutions, with additional challenges coming on line later in the year, looking at women’s health, and oncology. One of the unique elements of our G4A Partnership Program will be the rolling period of application review and acceptance throughout the calendar year — a strategy intended to help our investments respond to the market trends we foresee happening in the health tech space. For more information about Bayer’s G4A Partnership Program, visit our website.