Only 33 funding deals closed between January and August 2025. Half the volume compared to last year.
That’s the kind of reality check Galen Growth delivers in its latest HealthTech 250: Mid-2025 Trends & Outlook report.
This new report is a continuation of Galen Growth’s earlier HealthTech 250 study, which highlighted 250 early-stage healthtech companies to watch in 2025.
While the first report set the stage by spotlighting the most promising ventures, this mid-year update dives into how they’re actually navigating in a tougher, leaner market.
Here’s everything the report reveals.
Funding: Fewer deals, bigger bets
Globally, digital health funding is down 13% compared to the first half of 2024. However, the report found this trend to vary by region:
- U.S. funding: down by 28%. Hit hardest
- Europe: Up by 53%. Ventures are bucking the trend.
- Asia-Pacific region: steady, with little impact so far.
For the HealthTech 250 cohort, the decline is sharper. Between January and August, they raised $647 million. That’s less than half the $1.4 billion raised in the same period in 2024.
Yet the report says that the money hasn’t gone away from healthtech.
Investors have become more selective now. They are writing bigger checks for fewer companies.
While the average round size has climbed to $22.5 million, Series A has become the dominant stage, and seed funding has dried up.
Partnerships: Less noise, more substance
The Galen Growth HealthTech 250 report highlights that with only 33 deals so far this year (down from 66 in 2024), the fundraising cycle has stretched to an average of 25.7 months. This has forced startups to get creative, turning to bridge rounds and M&A.
The same “quality over quantity” shift is clear in partnerships. Partnerships have also thinned out, only 71 so far in 2025, down 50% year-on-year.
This shows a reset happening in the sector. Instead of experimental pilots, startups are signing strategic deals that bring scale, validation, and revenue. Big names like Mayo Clinic, Intermountain Health, MSD, and Sanofi are among those anchoring this shift.
Resilience and the path forward
The report notes that despite the pressure, the sector’s fundamentals are strong.
The HealthTech 250 cohort has a remarkable 95% survival rate, with 2.5% already acquired.
What’s keeping them afloat? It’s evidence.
So far this year, the cohort has delivered:
- 510 peer-reviewed publications
- 10 clinical trials
- 11 regulatory approvals
In healthtech, evidence is now the strongest currency.
Where’s the action, according to Galen Growth’s mid-2025 report
The report finds that therapeutic areas are leading the charge:
- Nutrition: $70 Mn
- Oncology: $64.5 Mn
- Mental Health: $63 Mn
Across the cohort, Mental Health (34 companies), Oncology (30), and Women’s Health (23) are in sharp focus. Interestingly, nearly two-thirds of startups (64%) are building disease-agnostic platforms, designed for flexibility across multiple conditions.
Geographically, the U.S. still leads (155 companies), Europe is leaning into oncology and validation strength, while APAC hubs like Singapore and South Korea are forecast to drive the fastest partnership growth into late 2025.
Comparing the two reports
The contrast between Galen Growth’s first 2025 report and this mid-year update is striking.
- Funding: Early 2025 saw $1.5B raised, signaling investor confidence. By mid-year, funding is down 13% globally, and more than 50% for the HealthTech 250 cohort.
- Partnerships: The initial report celebrated 700+ partnerships (over 5 years), showcasing a buzzing ecosystem. Mid-2025 shows fewer deals (a 50% decline year-on-year), but higher stakes. Partnerships must now deliver scale and revenue.
- Focus: Both reports highlight Mental Health and Oncology as dominant areas. But the second makes clear: bold ideas aren’t enough anymore. Evidence and validation are what separate survivors from the rest.
The bottom line
The mid-2025 HealthTech 250 report makes one thing clear: Healthtech isn’t slowing down; it’s maturing.
The gold-rush mentality of “growth at all costs” is over. The new playbook is “evidence at all costs.”
Investors are more disciplined, partnerships are more strategic, and startups are proving their science to secure survival.
The report’s findings show that success will belong to those who can demonstrate real clinical validation and a clear path to commercial success.
The companies that thrive in 2025 won’t just be the most promising, they’ll be the most proven.
-By Alkama Sohail and the AHT Team
