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Investment in digital health technology in Europe experienced a notable slowdown in 2023, according to a report by investment firm Karista. Despite the increasing prevalence of artificial intelligence (AI) applications in healthcare, funding for digital health initiatives declined, with a shift towards biotechnology and medical devices.
In 2023, the landscape of health tech investments primarily consisted of biotechnology companies, medical devices, and digital health, with biotech leading at 32%, followed by medical devices at 24%, and digital health at 23%, according to data from France Biotech. This shift in investment preferences translated to a decrease in the average amount raised in European funding rounds, dropping to an average of 10 million euros compared to 20 million euros in 2022.
Among the notable funding rounds secured in 2023 were those in the field of robotic surgery. Companies such as CMR Surgical, Distalmotion, and Moon Surgical raised significant amounts, indicating continued investor interest in surgical robotics.
Despite the decline in funding amounts, the number of investors in European e-health increased by 23% in 2023, with a total of 217 funds investing in the sector compared to 168 in the previous year. The geographical distribution of investments saw France, the United Kingdom, and Germany as the top destinations, with France leading at 24%.
Karista highlighted the emergence of the pharmatech sector, driven by the rise of AI in 2023, which saw a growth in investments and collaborations within the pharmaceutical industry. Collaborations and acquisitions by pharmaceutical companies, such as Aqemia, Owkin, Lunaphore, and Olink, reflected the growing importance of AI in drug discovery and development.
However, the macroeconomic context in 2023 posed challenges for the healthcare technology sector. FranceBiotech noted that the year saw a higher number of judicial liquidations compared to previous years, attributed to uncertainties in the economic environment and refinancing difficulties for some companies. Despite this, the sector still managed to create more than 15,000 direct jobs in 2023, representing a 40% increase over the past three years.
Remote monitoring emerged as a key focus area in 2023, with the reimbursement of remote monitoring solutions contributing to its growth. Products related to remote monitoring, computer-assisted diagnostics, telemedicine solutions, and data analysis saw significant traction within the digital health sector.
Looking ahead, while the challenges of 2023 have been noted, there remains optimism within the industry. With continued advancements in technology and increasing investor interest, the European digital health sector is poised for further growth and innovation in the coming years.
