2025 is already proving to be a notable year for healthcare innovation.
A significant amount of momentum and optimism is stemming from AI-related healthcare solutions, and these are proving to deliver returns. Startups at the intersection of AI and health have grown from $1 to $10 million ARR in record time thanks to the pressing need for solutions that improve healthcare delivery.
In turn, investor interest is picking up steam at a rapid pace.
In the biotech space, Eli Lilly and Andreessen Horowitz recently announced a new $500 million fund. Meanwhile, several mega-funding rounds that show the healthtech space has left the funding winter behind.
Examples of investments in GenAI and data analytics solutions include $275 million in further investment for healthcare data company Innovaccer, $141 million for Hippocratic AI, and $105 million for automated surgical workflow company Qventus.
Although funding and sustainable business models are key, this isn’t a trend driven by profit alone. Healthtech founders are driven by a desire to improve patient outcomes and plug the gaps we see in healthcare provision.
Mental health, for example, suffered from fragmented delivery and diagnostic difficulties. According to a global Lancet study, only a fraction of mental health conditions are currently identified by doctors. “That means a good 60% to 70% of people really just fall through the cracks,” according to Kintsugi CEO Grace Chang.
It’s these kinds of problems that are inspiring founders to build innovative startups that solve healthcare challenges from the ground up.
From improving access to real-world data, clinician engagement and addressing healthcare inequalities, let’s take a closer look at some unappreciated ways that innovation is helping to improve patient outcomes.
The rise of real-world data (RWD)
The ongoing adoption of technology in the healthcare space means that real-world data is now available in unprecedented ways.
For instance, traditionally, new medical solutions have needed to undergo multiple stages of development in addition to many controlled clinical trials.
However, today the increasing availability of electronic health records (EHRs), monitoring devices and wearable technologies mean that real-world data can be used to improve clinical trials, personalize medicine, and accelerate drug development.
Here, investors should pay attention to innovators in this space that break down accessibility barriers to make data and evidence available for clinical use. While the upside is clear, at the same time the sensitive nature of healthcare data and presence of HIPAA controls means that data initiatives are more complex than in other industries.
Companies are increasingly creating specific data platforms for healthcare and forging partnerships to deliver solutions that maintain compliance and make insights available, which is opening up new doors for transparency. “By integrating Lime Tree Health’s pioneering hospital pricing data into our platform alongside Payerset’s industry-leading price transparency capabilities, we’re setting the stage to make pricing intelligence accessible and actionable for everyone in healthcare,” according to Mark Brosso, CEO of PurpleLab.
With the creation of infrastructure and tools for real-world data, expect this to increasingly open up new opportunities in healthtech. AI tools that can turn complex data into clear, actionable insight have already proven valuable in other industries. In healthcare, the demand is growing fast.
Hospitals and insurers need better ways to make informed decisions quickly, and real-world data gives them a way to do that.
What’s worth paying attention to is that the companies building these tools now aren’t just solving a short-term need; they’re creating the systems that others will likely adopt, from hospital networks to government offices. Patient privacy will remain a major hurdle, but those who find secure ways to manage and share this data will earn trust, and ultimately a competitive advantage for both the company and early investors.
Further adoption of technology by medical professionals
The benefits of AI in healthcare are huge. However, the huge spike in investments from VCs could deliver lackluster returns if doctors and clinicians aren’t properly engaged.
Some healthcare providers may be reluctant to rely on technology in place of traditional methods, be too busy to learn new systems, or distrustful of the companies building the solutions.
If these platforms aren’t adopted by doctors, they won’t be effective, making this a key barrier to growth. According to Martin Lewit of Nisum, “There’s growing excitement around AI diagnostics and real-world data, but the real challenge is translating that potential into everyday clinical practice, especially across diverse regions and patient populations”.
Hesitation in adapting these tools is also rooted in fear that the technology will replace the human element. Added Nate MacLeitch of QuickBlox, “AI isn’t here to replace primary care providers—it’s here to reinforce them. When diagnostic tools can flag common conditions or guide early triage, it frees up clinicians to focus on complex care and human connection. It’s about making healthcare more efficient without losing its humanity.”
Another way that companies can improve healthcare outcomes is by using digital solutions to break down language barriers for physicians and clinicians where English isn’t the first language. “Improving access to clinical decision support tools in Spanish contributes to better decision-making, strengthens daily medical practices, and helps reduce health inequalities in Latin America,” according to Manuela Gutiérrez of 360 Health Data.
Today, more than 2 in 3 physicians are using health AI—up 78% from less than 2 years ago. As doctors increasingly adopt these technologies, expect even more opportunities for investments in this space.
Increased attention and focus on health equity improvements
The theme of health equity is not always associated with investments in healthtech, usually falling more under the area of governance and policy. However, investment opportunities in health are often tied to where the biggest value to the care system can be generated, making the case for digital health equity solutions.
Defined by the World Health Organization as “the absence of avoidable or remediable differences among groups of people,” making standards of care more equal across the US will reduce costly healthcare burdens.
Today, the U.S. consistently ranks last among high-income countries on measures of health equity. In fact, if left unaddressed, health inequity could cost the U.S. $1 trillion by 2040.
This disparity in care isn’t just about income between populations, but also the basic standards that are available. For example, rural populations are disproportionately underserved with healthcare provision typically centered around city-based delivery systems.
Fragmentation within healthcare can also cause issues with things like the provision of medication. A patient may see multiple specialists. If records aren’t easily available, issues can fly under the radar. According to Yoona Kim, CEO of Arine, “Mounting cost pressures and sweeping policy changes are forcing the industry to rethink how care is delivered. Amid these challenges, medications have emerged as one of the most powerful— and underleveraged —tools to improve outcomes and control costs.”
When patients fall through the cracks, the cost doesn’t just hit families; it hits the system. Missed diagnosis and poor medication tracking drive up expenses for societies. Digital tools that help prevent that are increasingly being adopted by health plans and providers looking for savings. Investing today in companies that are providing solutions in areas where the system shows weakness could prove to be valuable in the form of returns in the long run.
As more focus is spent on health equity in the U.S. and across the globe, expect this to provide increasing opportunities for investors.
Interest in healthtech startups is on the up
The recent spate of high-value rounds and new funds clearly demonstrate that investor interest in healthtech is on the up.
While larger rounds have dominated much of the attention, investors can also find opportunities in places that are at times more overlooked, such as increased access to real-world data, health inequalities being addressed, and solutions to engage doctors and clinicians.
