After a challenging year, the digital health industry sees some light at the end of the tunnel in 2023.
2022 was a difficult funding year for the digital health industry. Digital health business owners predict funding in 2023 to be similar as in 2022, however plurality of them are optimistic for revenues to grow significantly. Majority of the stakeholders also anticipate companies to keep their existing staff or start hiring again without massive lay-offs.
The funding trend in digital health has been steadily increasing in recent years. However, 2022 was a difficult year, a period of difficult economic changes, in which much of digital health’s “up” came down. According to several market reports including Rock Health, 2022’s annual funding ($15.3B) was just over half of 2021’s $29.3B.
In order to collect stakeholder opinions and predictions on various digital health topics including business KPI’s such as investments and revenues in 2023 , R2G conducted an annual global business outlook survey. The detailed results of the survey are discussed in the whitepaper “Global Digital Health Business Outlook Survey – 2023”. The survey results show that 60% of respondents currently offer digital health solutions. Of those, 52% predict similar funding growth as 2022 with little change. However, 15% anticipate a significant drop in funding for their business. Even though this may reflect or highlight the daunting reality of limited funding for digital health companies in the upcoming year, 33% of digital health business owners seem to be positive and predict the investments to grow significantly.
On the other hand, a fair share of digital health stakeholders (43%) offering a digital health solution anticipate revenues for their business to grow significantly. Moreover, nearly half of the respondents (51%) expect the revenues to be similar to 2022 and only 6% predict a significant decline. Even if the investors aren’t returning to the digital health market segment in 2023, the digital health business owners are optimistic and expect financial growth for their business.
The survey also aimed to discern the workforce hiring trend, especially in 2023, when a lot of lay-off news from multiple digital health companies have been floating around. According to 47% of industry stakeholders, 2023 is expected to see minimal fluctuations in workforce numbers, who anticipate little to no changes in staffing levels, avoiding large-scale hiring or layoffs. Another 30% of the respondents believe that the digital health industry will start hiring new staff in order to expand their team. Even though several leading digital health companies such as Teladoc, Akili, Noom, and Cue Health are implementing workforce reduction measures, the key industry stakeholders envision more or less a stable workforce scenario with no massive lay-offs in 2023. The market definitely seems confident to not experience massive lay-offs like other industries!
Conclusively, the digital health industry may have had a tough funding year in 2022 and might feel the effects of the pandemic and/or the Ukraine war in 2023. However, there’s some glimmer of light that can be seen at the end of the tunnel, for the digital health business owners are positive to have significant growth in revenues. Moreover, current lay-offs may just be a side note at the end of the year, for massive lay-offs aren’t envisioned by a large share of stakeholders. In the long run, digital health industry stakeholder’s optimism may result in positive outcomes for the digital health industry in 2023.
The whitepaper uncovers compelling insights and stakeholder perspectives, delving into key business opportunities, partnership trends, key drivers of the digital health industry, and much more. Download your free copy now!
R2G has been constantly monitoring the global digital health industry since 2010. We provide strategic advice for how to build and grow a successful digital health business within all therapeutic areas, business models and regions. We are happy to talk and share our experience!
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