Global healthcare investment rose for the seventh consecutive quarter, albeit at a slower pace. Funding surpassed $34.7B across nearly 1.6K deals. The acceleration of digital transformation initiatives was a major contributor, with digital health startups accounting for 40% of both the deals and funding raised in the quarter ($14.1B across 628 deals).

European investment nearly doubled quarter-over-quarter (QoQ) to reach $6.9B. Q2’21 was the fifth quarter in a row to see QoQ European investment growth. Asian investment fell for the second quarter in a row, though at $7.4B, it remained elevated vs. pre-Q3’20 levels.

A flood of new entrants pushed early-stage deal share above 50%. Coming in at 54% of global healthcare deals, early-stage deal share was the highest it’s been since Q3’19.

M&A activity persisted. Within digital health, acquisition hotspots included primary care, women’s health, and mental health.

The top healthcare deals in the quarter (by deal size) went to companies working in life sciences (Caris Life Sciences, Adagio Therapeutics, Exscientia), medtech (CMR Surgical), and digital health (Noom).

The SPAC frenzy continued within digital health. During the quarter, 3 companies made their public market debuts through SPAC deals, while 7 others announced plans to do so soon.

Eleven healthcare startups joined the unicorn club during Q2’21 (valued in aggregate at $27B). Globally there are currently 78 healthcare unicorns valued in aggregate at $214B.