The year in healthcare venture: five patterns we saw repeat

Capital concentrated at the top

The mega-rounds returned, but they went to a smaller number of companies. Seed remained active. Series A was the tightest stage of the year — the gap between promising and fundable widened significantly.

Where the money went

AI-enabled diagnostics, GLP-1-adjacent platforms, revenue cycle automation, and specialty pharmacy were the four categories with the most concentrated activity. Mental health and general wellness cooled significantly.

The quiet deflation

Several 2021-vintage unicorns quietly took down rounds this year. Structured secondaries became a routine feature of late-stage financings. Expect this to continue into 2025.

What we are watching in 2025

Value-based primary care, embedded finance for providers, clinical trial infrastructure, and the first wave of autonomous back-office agents in health systems. Each has strong tailwinds and few well-capitalized incumbents.

The barbell in check sizes

One pattern that stood out across the year was a barbell forming in round sizes: very large rounds for a small number of companies with clear commercial traction, and very small, tightly structured seed rounds for first-time teams, with comparatively little happening in between. Series A and B rounds for companies without clean unit economics or a validated payer relationship became harder to close, and the ones that did close often took longer and involved more investors doing independent diligence.

For founders, the practical implication is that the middle stage of company building now requires proof points earlier than founders were used to. A pitch built on total addressable market and a strong team was sufficient to raise a B round in prior cycles; this year it consistently was not.

Categories that outperformed expectations

Infrastructure and tooling companies — the unglamorous layer of billing, prior authorization, and data interoperability — attracted more durable interest than many consumer-facing digital health brands. Investors seemed to reward businesses that reduced cost for an incumbent payer or health system over businesses that tried to acquire patients directly, a preference that tracks with the broader retreat from consumer acquisition-heavy models across the sector.

Specialty-specific AI tools, particularly ones embedded into an existing clinical workflow rather than sold as a standalone product, also held up well. The through-line across both categories is that investors favored businesses with an identifiable, motivated enterprise buyer over businesses betting on aggregated consumer demand.

The categories that went quiet

Direct-to-consumer telehealth for common, low-acuity conditions saw a marked cooling. The category had been treated as a wedge into broader primary care relationships, but that thesis mostly did not play out — patients used these services episodically rather than as a durable front door, and the customer acquisition costs never came down as promised.

A number of point-solution wellness apps aimed at employers also faded from view, not because employers stopped caring about wellbeing but because benefits leaders consolidated vendor lists and favored platforms bundling several point solutions into one contract, echoing the consolidation pattern playing out on the clinical side of digital health.

Heading into next year

Founders raising in the coming year should expect diligence to focus heavily on gross margin composition and the concentration of revenue among a small number of enterprise accounts — investors are visibly wary of businesses that look diversified on paper but depend on renewing two or three large contracts.

The firms we work with most closely are also asking earlier-stage companies to articulate a credible path to a specific payer or health system as a named reference customer well before a Series A conversation, rather than treating that validation as a later-stage milestone.