A few years ago, the benefits of wearing a ring to track your heart rate and temperature might have seemed like something of interest to your gadget-obsessed cousin, but few others.
But since 2020, organizations from the NBA to the Department of Defense have used Oura rings as part of their strategies to mitigate the spread of Covid-19.
And that’s just one example in a broader pattern of the pandemic accelerating adoption of digital-health tech, as more people have embraced telemedicine, at-home fitness setups, and mental health apps.
Even as the world continues to seek a return to “normal,” many changes in the ways we use tech for our health and wellbeing may be here to stay.
Here are five charts that show the current state of the digital health industry.
Global VC investment in digital health companies in 2021 totaled more than $57 billion, according to data from CB Insights. That’s an increase of nearly 80% compared with 2020.
Much of that growth was driven by bigger and bigger funding rounds. The digital health deal count in 2021 was only 16% higher than the year prior, but the number of megadeals—companies raising more than $100 million—nearly doubled, according to CB Insights.
A note of context: Global VC funding rose 111% YoY in 2021 to a record $621 billion, so while digital health’s growth was significant, it isn’t an anomaly. Digital health investments made up about 9% of total VC dollars last year—down slightly from 11% in 2020, but up from 6% in 2015, according to CB Insights.
Mental health and wellness tech in particular saw explosive growth in 2021. Funding to companies in this space increased by 139% YoY to $5.5 billion last year, according to CB Insights.
“I think that retail [health tech] experienced a big surge because of the pandemic,” Kaia Colban, emerging tech research analyst at Pitchbook, told Emerging Tech Brew. “Employers started investing a lot more in corporate wellness, such as mental health. So we saw that soar—that just raised so quickly—because employers are providing it to their people.”
Tech targeting mental wellness seems poised to continue rapid growth with investors backing lots of young companies in the space. Last year, 68% of the mental-health tech deals were in early-stage startups, which is slightly above average compared with all VC deals, according to CB Insights.
While growth in wearables hasn’t been as rapid as other digital-health tech, the way consumers, companies, and health care professionals use the data they provide is changing.
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“A lot of times, [these] wearables are giving you data, but they’re not really telling you what to do with it. I think there’s going to be a lot more partnerships among the different data providers,” Colban said.
An Apple Watch, for example, could track metrics like your heart rate and your oxygen level and share that data with a sleep monitoring device to determine the optimal light and temperature for the highest sleep quality, she said.
“In order to create preventative medicine and a holistic offering, it’s not going to be [that] one device does everything,” she said. “A lot more companies focused on integration in the past year, and just creating standardized APIs so they can transmit this data to other systems.”
This increasing interconnectedness of wearables extends beyond consumer tech into organizations as well—and it means significant opportunities in the Internet of Medical Things market, which is projected to grow to $172 billion by 2030.
Colban said she expects more health care providers to use wearable devices as tools for monitoring patients.
“I really think biometric devices—they’re going to switch from being primarily direct to consumer, as we’ve seen for the past couple years, and more like remote patient monitoring, where they have the capability to send this data back to the doctor,” she said.
“We saw a lot of at-home fitness devices such as Tonal and Tempo and Peloton do really, really well. But gyms are starting to re-open,” Colban said.
Peloton, which leads the market for high-end at-home fitness products with about 65% share, illustrates that drop-off. The company recently stopped producing its bikes and treadmills, citing diminished demand.
Everyone who was going to buy one, bought one,” Colban said. “And I think that could be a barrier for at-home fitness devices.”
But as companies work on lower-cost versions of this tech, demand could return, she said.