6 Digital Health Startups to Watch in 2022

6 Digital Health Startups to Watch in 2022. I laptop computer with a rocket taking off on the screen connected to a series of health icons.

A record $37.9 billion poured into the U.S. digital health market in 2021, according to CB Insights’ recent “State of Digital Health” report. A large share of that money helped fund startups focusing on telehealth, mental health and wellness, and digital therapeutics.

Here’s a brief rundown of how each sector is evolving, followed by significant funding rounds in the fourth quarter last year and early 2022 across startups in these three areas.

1 | Telehealth market maturing

As the market continues to mature, larger telehealth providers are expanding services beyond urgent care to include more specialized care in areas like musculoskeletal disorders, kidney disease and cardiology. And even though virtual visits have come down off their highs during the pandemic, many investors are still bullish on the sector. Global investments in telehealth companies topped $17.6 billion in 2021 — a 68% increase from 2020, CB Insights notes.

2 | Mental health/wellness tech on the rise

With the market for behavioral health and wellness apps and online services expanding rapidly, investment capital in the sector soared 138% to $5.5 billion in 2021. That’s about five times that of 2018, according to CB Insights data. As with telehealth in general, some large online providers are broadening their services to include support for complex psychiatric and substance-use disorders. Privately held companies valued at more than $1 billion include Cerebral, Modern Health, Lyra Health and Ginger.

3 | Digital therapeutics gains traction

Offering the potential to treat chronic conditions at scale, digital therapeutics continues to generate strong investor support. Investments in the sector have increased by an average of 40% annually over the past seven years, McKinsey & Company reports. Year-over-year funding in the sector rose by 133% in 2021, CB Insights states. Digital therapeutics uses evidence-based software to prevent, manage or treat a wide spectrum of physical, mental and behavioral conditions. They are different from wellness apps or medication reminders in that they require rigorous clinical evidence to substantiate intended use and impact on disease state.

The 6 Digital Health Startups Catching Investors’ Attention

The following startups all had significant investment rounds in Q4 of 2021 or January. All companies offer virtual care in some form, with behavioral health services becoming an increasingly hot sector.

  1. BetterUp: This startup mental health and coaching mobile app was recently valued at $4.7 billion after raising $300 million in a Series E funding round in October. Launched in 2013, the company has more than 3,000 coaches and reportedly grew the number of its behavioral scientists by 50%. www.betterup.com
  2. Cerebral: This mental health subscription service provides clients with ongoing access to online care and medication management for a monthly fee. Cerebral treats conditions that include anxiety, depression, insomnia, postpartum and menopausal depression and more. Launched two years ago, the startup netted $300 million in a Series C round in December, increasing its valuation to $4.8 billion. cerebral.com
  3. Hinge Health: The digital musculoskeletal clinic, which partners with employers and health plans, is valued at $6.2 billion and announced a $400 million Series E funding round in October. The company reported that its patient base doubled in 2021 and it will use more than $1 billion invested in the company to expand its clinical, data science and research and development teams. www.hingehealth.com
  4. Learn to Live: In January, the company, which offers digital cognitive behavioral therapy combined with live clinician support to 33 million people nationwide, announced a substantial albeit undisclosed funding round led by Concord Health Partners. The company plans to use the funds to reach more people faster, fitting with its mission to increase access and extend the capacity of an already stretched system. Concord Health Partners and the AHA in 2019 launched a $50 million venture capital fund to invest in early stage startup companies that help hospitals and health systems transform care delivery and spur innovation. www.learntolive.com
  5. SWORD Health: A provider of virtual and digital physical therapy, the company was valued at $2 billion after a Series D funding round of $163 million in November. SWORD will use the money to develop more personalized physical therapy offerings, including preventive therapy and post-surgical care among other things. Launched commercially in 2020, the company’s services are sold to employers who offer them as a benefit. swordhealth.com
  6. WorkIt Health: Offering virtual substance-use and alcohol-treatment services, WorkIt raised $118 million in an October funding round that included participation from CVS Health Ventures and BCBS Venture Fund. The influx of cash will help the company expand into new regions this year and be national by 2023. WorkIt will also expand its primary and psychiatric care offerings to patients in their homes. The company says its data show that 84% of WorkIt members stay in the program more than 30 days and 41% receive treatment for longer than one year. Comparatively, only about one-third of patients nationwide stay in treatment for at least a month, the company states. www.workithealth.com

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