Digital Health Investment Soars

Apr 21, 2021 | Blog

By Dave Vreeland

Without a doubt, 2020 was a difficult year for the healthcare industry. The pandemic brought to light the risks of a fractured U.S. healthcare system and perpetually underfunded public health. But there is a silver lining. The additional burdens placed on the system have led to unprecedented acceleration of innovation. After decades of slowly creeping toward more patient-centered, data-driven, higher quality and cheaper care, COVID-19 has been a catalyst to rapidly move toward digitization. Technologies such as telehealth and remote patient monitoring have quickly become the new normal. And this is just the beginning.

Rock Health’s 2020 Market Insights report revealed that $14.1 billion was invested in healthcare innovations in 2020, a 72 percent increase from 2018. With $6.7 billion invested in just the first three months of 2021, the digital health sector will continue to be hot for the foreseeable future.

Among the many valuable findings of this report, it shows that seasoned investors are doubling down on investments throughout the year. These are not new entrants chasing a trend. Nearly two out of three investors are veterans who understand the opportunities and risks associated with the sector.

What does this mean?

We are in a pivotal moment as we enter the golden age of digital health. It’s clear that there are enormous opportunities for entrepreneurs, investors and buyers in this time of transformation. But, not all areas of the industry are equally positioned for growth. At Caduceus Capital Partners, we target the digital health sectors that can create the most benefit to the industry. These are companies that set themselves apart by delivering cost-effective solutions, great teams and demonstrated growth potential.

Success comes when there is deep collaboration among entrepreneurs, their investors and their customers. Experience and sound judgement are vital, and focus should always remain on long-term value creation rather than short-term gains.

In short, we see a flood of promising digital health companies looking to make their mark, and investors wanting to take advantage of this moment in time. But success will depend on aligning the best people with a solid plan. Caduceus Capital Partners has developed a disciplined approach to digital health investing, which has consistently delivered successful outcomes for our LPs and portfolio companies. By employing models developed over decades of work in the healthcare industry, we can cut through the noise to identify digital health innovations that matter.


Dave Vreeland, senior managing partner at Caduceus Capital Partners, is a well-known national expert on healthcare IT and the future of the healthcare industry. Building on more than 25 years of experience in healthcare management consulting, Dave is an active leader and advisor in early stage digital health strategies. At Caduceus Capital Partners, he invests in early stage digital health companies poised to make a difference in shaping the way healthcare is accessed, delivered, and paid for across the country.