Digital health startups pocketed $4 billion in venture capital funding in the first quarter of 2026, $1 billion higher than the same quarter last year and marking the strongest first quarter since the pandemic peak.

In Q1 2025, digital health companies had raised $3 billion across 122 deals compared to 110 deals this year. Average deal size climbed to $36.7 million, the highest average Rock Health has tracked in a single quarter since Q4 2021, according to the company’s Q1 digital health funding recap report.

Building on trends from last year, capital is concentrating among a small number of megadeals as venture capital investors place their bets on artificial intelligence-enabled startups.

Just 12 companies captured an outsized share of capital, or 59% of total quarterly funding, with financing deals at $100 million or higher. Wearable-maker Whoop recently raised a $575 million series G round, as it reportedly eyes an IPO; OpenEvidence snagged $250 million in a series D round, its third round in under a year; and Verily picked up $300 million as it transitions out from under Alphabet’s umbrella.

Among the dozen megadeals in Q1, telepsychiatry provider Talkiatry landed a $210 million series D; eMed, an employer-focused telehealth platform, clinched $200 million in series A funding; hybrid mental health provider Grow Therapy raised $150 million; value-based care enablement company Honest Health landed $140 million; and Solace, a patient advocacy platform, brought in $130 million in series C financing.

The top Q1 deals also include Qualified Health, which locked in $125 million in funding; Garner Health, a digital care navigation company for employers that pocketed $118 million; Cognito Therapeutics’ $105 million pickup; and women’s health provider Midi Health’s $100 million raise, reaching “unicorn” status.

The Rock Health report outlines several key trends shaping digital health funding as AI now becomes a table-stakes expectation. 

“The companies successfully raising are those moving earliest into complex, workflow-embedded use cases: from Doctronic’s prescribing pilot in Utah, to OpenEvidence integrating with health system EHRs,” Rock Health researchers Ashwini Nagappan, Madelyn Knowles and Jason Lei wrote in the report.

Direct-to-consumer models continue to scale, with a new wave of AI-native consumer platforms, Rock Health researchers note.

Investors are increasingly backing DTC companies, reinforced by a number of tailwinds, including clearer FDA guidance on low-risk wellness products, extended telehealth flexibilities through 2027 and growing confidence in meeting the needs of an increasingly activated consumer, the Rock Health report notes.

In Q1, DTC companies made big investments in Super Bowl advertising and the market saw expanded distribution pathway through initiatives like TrumpRx. Companies also accelerated their D2C strategies with Maven Clinic launching a direct-to-consumer platform.

AI companies are also pushing into healthcare with new AI features that function like a front door to care, including OpenAI’s ChatGPT for Health, Anthropic’s Claude for Healthcare and Perplexity rolling out an AI-powered search and answers engine for health data.

There are also policy tailwinds driving the digital health market, Rock Health researchers note. CMMI’s ACCESS Model payment rates went live in February. Nearly every major payer in the country also signed a pledge that expands the model to the Medicare Advantage, Medicaid and commercial markets. HHS is putting a heavy focus on advancing interoperability and data access through its Health Tech Ecosystem initiative while also stepping up enforcement of information blocking.

Looking at the exit market, Rock Health researchers note that the IPO window remains narrow. There are several companies that the market is watching, including smart ring maker Oura, Aledade, Included Health, Maven Clinic, Virta and Zelis.

M&A is a mixed picture, according to Rock Health, as Q1 2026 saw 43 digital health deals, a slight uptick from last quarter’s 30 deals.

“The first quarter of 2026 points to a market that is active, but selective. For organizations operating in an AI-as-table-stakes environment, expectations are shifting around how care is accessed and delivered—and the rest of the year will clarify where momentum is durable and where it’s just temporary,” the Rock Health researchers wrote.