Venture capitalists ramped up investments in the city’s digital health startups early this year as firms navigate economic uncertainties of the changing federal administration.
Thirty-two digital health companies raised $1 billion during the first quarter, according to recent data published by industry group Digital Health New York.
Total funding was up 11% from last year – a sign that venture capital firms haven’t halted investments despite the economic turmoil that has set in since the start of President Donald Trump’s administration, said Bunny Ellerin, co-founder and CEO of Digital Health New York. The funding boost signals that investors are maintaining a long-term outlook rather than reacting to immediate market volatility, she said.
Federal policy changes sent the stock market into a plunge earlier this month – a sign that investors might be more selective about where to deploy their capital. But fundraising in the first quarter was largely unscathed; companies across the U.S. saw higher investments, with the median deal size increasing from $15.5 million to $24.4 million from the last quarter of 2024 to now, according to a report released by Rock Health earlier this month. The nationwide fundraising total was up too, reaching $3 billion in the first quarter.
Analysts from Rock Health call the current landscape a “David and Goliath story:” early-stage companies dominate the deal landscape while late-stage firms account for most of the funding.
Two-thirds of all investments in the city flowed to late-stage companies, continuing a trend of higher fundraising among companies that have proven that their product works and are looking to scale, Ellerin said.
Companies that raised the most money this year so far specialize in health care coordination, diagnostics and testing and insurance navigation. LetsGetChecked, an at-home testing company based in Astoria, notched the largest fundraise with $165 million in a Series F round in January. The startup’s recent funding round, led by undisclosed investors, comes a few months after it acquired online pharmacy company Truepill in a $525 million deal.
The second-highest fundraise went to BlinkRx, a SoHo-based digital pharmacy startup that delivers prescriptions to patients’ homes. The firm raised $140 million in a Series D funding round in February, led by private equity firm 1789 Capital that has named Donald Trump Jr. as one of its partners. Trump joined the board of BlinkRx after its most recent fundraise.
Other companies that scored top funding rounds include Chelsea-based Aescape, which raked in $83 million to advance its robotic massage table, and Navina, a clinical intelligence company that’s also based in Chelsea and raised a $55 million Series C round in March.
