---

description: Global healthcare venture financing reached 60.4 billion in 2025 but AI-native companies capture 54 percent of funding with a 19 percent deal premium while mega-deals over 100 million account for 42 percent of total and Agilon collapsed from 10 billion to 255 million
type: claim
domain: health
created: 2026-02-17
source: "Health tech VC landscape analysis February 2026; OpenEvidence Abridge Hippocratic AI fundraising disclosures; Agilon Health SEC filings; Rock Health digital health funding reports 2025; Bessemer Venture Partners State of Health AI 2026"
confidence: likely
related:
- AI native health companies achieve 3 5x the revenue productivity of traditional health services because AI eliminates the linear scaling constraint between headcount and output
reweave_edges:
- AI native health companies achieve 3 5x the revenue productivity of traditional health services because AI eliminates the linear scaling constraint between headcount and output|related|2026-03-28
---

# healthcare AI funding follows a winner-take-most pattern with category leaders absorbing capital at unprecedented velocity while 35 percent of deals are flat or down rounds

Global healthcare venture financing reached $60.4 billion in 2025, the strongest annual deployment in years, with digital health funding hitting $14.2 billion. But the headline number masks a deeply bifurcated market.

**The winner-take-most dynamic:** AI-native companies capture 54% of all sector funding with a 19% premium on average deal size. Category leaders are raising at unprecedented velocity -- OpenEvidence went from $1B to $12B valuation in under 12 months ($700M raised), Abridge raised $550M in four months reaching $5.3B, Hippocratic AI hit $3.5B with $404M total. These companies are absorbing the lion's share of capital. a16z, General Catalyst, and Kleiner Perkins each participated in 5+ mega-deals, functioning as kingmakers. Mega-deals ($100M+) accounted for 42% of total funding -- capital is concentrating in fewer, larger bets.

**The losers:** 35% of all 2025 deals were flat or down rounds -- the highest rate since 2022-2023. Agilon Health collapsed from ~$10B+ market cap at IPO to $255M, posting $110M quarterly net losses despite $5.89B in revenue. Calm went from $2B to $1B valuation despite 4x revenue growth. Cerebral cannot pay its fines. 600+ companies that last raised in 2021-2022 haven't raised again or exited, many facing valuation overhangs from peak-era multiples. Distressed exits are accelerating (Thirty Madison $1B to $500M, SteadyMD $25M exit after raising $40M).

The emerging consensus: healthcare AI is a platform shift, not a bubble, but the shift creates winner-take-most dynamics where category leaders absorb capital while everyone else fights for scraps. The IPO window is opening cautiously (Hinge Health at ~60% discount, Insilico Medicine in Hong Kong). 2026 demands fundamentals: clinical-grade evidence, regulatory clarity, proven path to profitability. 15 new unicorns were minted in 2025, predominantly in AI-enabled categories.

**Bessemer corroboration (January 2026):** 527 VC deals in 2025 totaling an estimated $14B deployed. Average deal size increased 42% year-over-year (from $20.7M to $29.3M). Series D+ valuations jumped 63%. AI companies captured 55% of health tech funding (up from 37% in 2024). For every $1 invested in AI broadly, $0.22 goes to healthcare AI — exceeding healthcare's 18% GDP share. The Health Tech 2.0 IPO wave produced 6 companies with $36.6B combined market cap, averaging 67% annualized revenue growth. Health tech M&A hit 400 deals in 2025 (up from 350 in 2024), with strategic acquirers consolidating AI capabilities.


### Additional Evidence (confirm)
*Source: [[2026-01-01-bvp-state-of-health-ai-2026]] | Added: 2026-03-16*

Abridge raised $300M Series E at $5B valuation and Ambiance raised $243M Series C at $1.04B valuation by early 2026, demonstrating the capital concentration in category leaders. Function Health's $300M Series C at $2.2B valuation further confirms winner-take-most dynamics in health AI.


### Additional Evidence (confirm)
*Source: [[2026-01-01-openevidence-clinical-ai-growth-12b-valuation]] | Added: 2026-03-18*

OpenEvidence valuation trajectory demonstrates winner-take-most dynamics: $3.5B → $6B → $12B in under 12 months, with $250M Series D led by Thrive Capital and DST Global. This 3.4x valuation increase in months while 35% of healthcare AI deals are flat/down rounds confirms capital concentration in category leaders.

---

### Additional Evidence (confirm)
*Source: [[2026-03-21-openevidence-12b-valuation-nct07199231-outcomes-gap]] | Added: 2026-03-21*

OpenEvidence raised $250M at $12B valuation in January 2026, representing a 3.4x valuation increase in approximately 3 months (from $3.5B in October 2025). This is extraordinary velocity even by AI standards, with the company achieving $150M ARR (1,803% YoY growth from $7.9M in 2024) at ~90% gross margins. The winner-take-most pattern is evident as OE captures the clinical AI category.


Relevant Notes:
- [[OpenEvidence became the fastest-adopted clinical technology in history reaching 40 percent of US physicians daily within two years]] -- the category-defining company in healthcare AI clinical workflows, $12B valuation
- [[ambient AI documentation reduces physician documentation burden by 73 percent but the relationship between automation and burnout is more complex than time savings alone]] -- Abridge at $5.3B represents the ambient documentation category winner
- [[AI diagnostic triage achieves 97 percent sensitivity across 14 conditions making AI-first screening viable for all imaging and pathology]] -- diagnostic AI companies like Viz.ai ($1.2B, stale 2022 valuation) face pressure to grow into peak-era valuations
- [[AI compresses drug discovery timelines by 30-40 percent but has not yet improved the 90 percent clinical failure rate that determines industry economics]] -- AI drug discovery (Insilico IPO, Recursion underperforming) shows the prove-it mode dynamic
- [[four competing payer-provider models are converging toward value-based care with vertical integration dominant today but aligned partnership potentially more durable]] -- Devoted Health at $16.1B and Alignment Healthcare at $4.1B represent VBC winners; Agilon at $255M represents the catastrophic failure mode
- [[Oura controls 80 percent of the smart ring market with patent-defended form factor while a demographic pivot from fitness enthusiasts to wellness-focused women drives 250 percent sales growth]] -- Oura's $900M raise at $11B exemplifies winner-take-most capital concentration in consumer health
- [[WHOOP subscription-only wearable model generates $260M revenue but trails Oura at half the revenue and a third the valuation because fitness-first positioning limits the addressable wellness market]] -- WHOOP's 4+ year fundraising gap illustrates the other side: companies that miss the capital wave face stale valuations

Topics:
- health and wellness
