Telehealth investment hit an all-time high of $4.2 billion in just 139 deals in the first quarter, almost doubling the $2.2 billion raised in the same quarter a year ago, according to CB Insights.
That's the highest global funding for telehealth during one quarter on record, according to the company's first-quarter 2021 report. Funding also was up 18% from the $3.6 billion raised in the fourth quarter of 2020.
Industry executive discussions around telehealth and its role in care delivery remain active, based on mentions of telehealth during company earnings' calls, CB Insights reported. During the second quarter of 2020, there were close to 1,200 mentions of telehealth on earnings calls. And, while that dropped to 517 mentions in the first quarter of 2021, it's still much higher than pre-COVID levels.
Meanwhile, as COVID-19 vaccines roll out, industry executive discussions on the topic are starting to taper off. The focus is shifting toward the pandemic’s long-term effects, such as virtual care, according to the report from CB Insights, a market intelligence firm.
The money poured into the telehealth sector helped to boost six companies to "unicorn" status: when a company's valuation hits $1 billion. Hinge Health, Dispatch Health, K Health, Innovaceer, Modern Health and Evidation all raised massive funding rounds in the first quarter that helped propel them to unicorn status.
The first quarter also saw companies that provide hybrid in-person and virtual care services bank late-stage "mega-rounds." Tech-enabled primary care provider Forward scored $225 million in a series D round, and Crossover Health clinched $168 million in a series D round.
The space also has attracted large acquirers, including Boston Scientific's move to buy remote cardiac monitoring company Preventice Solutions for $1.2 billion and Cigna subsidiary Evernorth's grab for MDLive.
Dollars for artificial intelligence startups also skyrocketed during the first quarter.
Globally, healthcare AI companies brought in a record-breaking $2.5 billion in the first quarter of 2021 in 111 deals. That's up 140% compared to $1 billion raised in the first quarter of 2020.
Healthcare AI also continues to gain attention from industry executives, as mentions of AI and machine learning in healthcare topped 2,200 during company earnings calls last quarter, according to CB Insights.
The AI sector's record-setting quarter was largely propelled by mega-rounds totaling about $1.5 billion. These rounds spanned applications from drug discovery to patient payments.
Insitro, which developed a machine learning platform to accelerate drug R&D and predict the success of drug targets in clinical trials, scored $400 million backed by Google Ventures and other investors.
Cedar, a digital health company using a machine-learning-powered payment platform to help healthcare providers engage patients with personalized messages, snagged $200 million led by Tiger Global Management.
Strive Health uses healthcare data such as clinical information, dialysis machines, claims data, demographics and more to monitor and predict kidney health. The company raised $140 million in new funding during the first quarter.
Back-office automation also attracted major funding with Infinitus Systems, which uses conversational AI to automate phone calls for providers as they collect data or check status updates, pulled in $21 million. Revenue cycle management startup Akasa uses AI-powered RPA to automate and spot efficiencies in revenue cycle management. That company brought in $60 million backed by Andreessen Horowitz.
CB Insights reported that global healthcare funding hit a new quarterly record in the first quarter with a total of $31.6 billion in equity funding. Deal count grew by 9% to more than 1,500 deals, the second-highest in the last 12 quarters.
Global digital health funding jumped by 9% quarter over quarter in the first quarter of 2021, to reach an all-time high of $9 billion.