Digital Therapeutics, the fastest-growing area of healthtech with transformational potential for medical outcomes. We take a closer look at the innovation and investment landscape of DTx, in partnership with Inkef, MTIP and Speedinvest.
- Digital therapeutics has grown the fastest of any healthtech segment since 2017.
- Global VC funding in digital therapeutics has increased 4x since 2017 to $1.2B in 2022 year to date.
- Combined enterprise value of global digital therapeutics startups has grown 8x in the last five years, now totalling $31B.
- Regulation and reimbursement of digital therapeutics is gradually happening over Europe, which is a frontrunner compared to the US and Asia.
- Pharma is taking big interest in digital therapeutics innovation, including through partnerships with and investments in startups
Digital therapeutics (DTx) are software-based medical interventions designed to directly treat a disease. These are tested for safety and efficacy in clinical trials, evaluated by regulatory bodies, and prescribed by healthcare providers. DTx are designed and tested much like traditional prescription drugs, with one distinction: rather than taking a pill or an injection, patients are treated with software.
These companies are now worth a combined $31B.
Global VC funding in digital therapeutics has increased 4x since 2017 to $1.2B in 2022YTD. Though VC activity in 2022 so far is down 63% compared to full year 2021 amid a global pullback in venture capital investment, 2022 funding has already surpassed 2020 levels.
DTx is a nascent healthtech segment on the rise, with relatively high growth in VC funding and low combined enterprise value compared to other healthtech segments.
Digital therapeutics has been the fastest-growing segment in healthtech since 2017, raising 4.3x 2017’s funding.
And the space itself is also diverse, covering applications including cardiology, diabetes, femtech and mental health.
In Europe, the growth in early-stage startup investment is even more pronounced compared to the US. Europe has grown 9.0x compared to 2016 and the US increased 3.6x. Europe is just a few years behind the US. Early stage VC investment in Europe in 2020 almost equals the US in 2016.
