Every year, billions of venture dollars are poured into U.S. digital health startups with the hopes of rich returns. These companies promise to “disrupt”, “redefine”, and “transform” healthcare as we know it. Some go on to do just that, while others have failed to live up to their hype.

I wanted to take a look at the companies that have raised the most funding (thanks Rock Health team for pulling this data!) and see where they are today. This post will look at the top ten highest-funded digital health startups: Tempus, Ro, Peloton Interactive, Jawbone, Lyra Health, Olive AI, Amwell, Hinge Health, 23andMe, and XtalPi. Let’s go!

Tempus

Total funding: $1.3B
Latest valuation: $8.1B (2020)
Year founded: 2015
Current status: Active
Number of employees: 2,083
Location: Chicago, IL
About: Tempus is a technology company that is making precision medicine a reality by gathering and analyzing clinical and molecular data at scale. Through its machine learning and AI platform, Tempus provides physicians with actionable insights to help them make more personalized treatment decisions for their patients. They recently launched an AI ‘assistant’ for oncologists.

Ro (previously Roman)

Total funding: $1.0B
Latest valuation: $7B (2023)
Year founded: 2017
Current status: Active
Number of employees: 802
Location: New York, NY
About: Initially known for its men's health platform, Ro has expanded into a telehealth powerhouse, providing personalized, on-demand health services. With a vertically integrated model, Ro provides a digital healthcare clinic for patients, a telemedicine platform for physicians, and a pharmacy for medication delivery. The company has served over 1.5 million patients in the past five years. Ro laid off 18% of its workforce earlier this year.

Peloton Interactive

Total funding: $976M
Latest valuation: $3.36B (July 2023, a fraction of its peak market cap of $50B)
Year founded: 2012
Current status: Public
Number of employees: 4,120
Location: New York, NY
About: Peloton Interactive is a fitness-tech company merging high-design exercise equipment with live, interactive digital classes. The company's connected fitness products include its famous stationary bike and treadmill, which come with a subscription service to live and on-demand classes, creating a community-based workout experience. After a boom during the pandemic, 2022 was a difficult year for Peloton, which laid off 6,700 people and saw revenue fall by 22%.

Jawbone

Total funding: $946M
Latest valuation: $0
Year founded: 1999
Current status: Deadpool
Number of employees: 0
Location: San Francisco, CA
About: Jawbone started as an audio technology company but pivoted to health and wellness devices. While it was known for its wireless speakers and Bluetooth headsets, its UP fitness trackers gained much attention. Amidst fierce competition, manufacturing hurdles, and internal management issues, Jawbone struggled to sustain its market position. Despite substantial funding, the company was unable to achieve profitability and shut down in 2017. Read more Cautionary Tales.

Lyra Health

Total funding: $890M
Latest valuation: $5.58B (2022)
Year founded: 2015
Current status: Active
Number of employees: 2,020
Location: Burlingame, CA
About: Lyra Health is a leading digital health platform providing comprehensive mental health benefits to employers. Using matching technology and a digital platform, Lyra connects employees to top-tier therapists, mental health coaches, and personalized medication prescribing, helping businesses address the rising need for accessible mental health services. Lyra seems to have avoided layoffs this last year, and maintains excellent employee reviews on Glassdoor.

Olive AI (previously CrossChx and just Olive)

Total funding: $855M
Latest valuation: $4B (2022)
Year founded: 2012
Current status: Active
Number of employees: 860
Location: Columbus, OH
About: Olive AI is an automation company that strives to streamline healthcare administration. It offers an AI workforce platform that automates repetitive, time-consuming tasks so that healthcare professionals can focus on patient care (the founder talks about pivoting 27 times before funding product market fit). Olive's solutions include revenue cycle management, IT integration, and clinical administration. This year, Olive laid off 35% of its workforce and sold off one of its businesses.

Amwell

Total funding: $843M
Latest valuation: $628M (July 2023)
Year founded: 2006
Current status: Public
Number of employees: 1,123
Location: Boston, MA
About: Amwell is a telehealth platform that connects patients with doctors over secure video. The company offers a single, comprehensive platform to support all telehealth needs, including urgent care, acute care, and post-acute care. Amwell went public in 2020, and the stock spiked 42% in the first day of trading. In 2022, Amwell made $277 in revenue, a 9.5% YoY increase. Unfortunately the company is hemorrhaging cash, posting a nearly $400M loss in Q1 of this year. The company’s market cap is currently valued for less than what VCs put in.

Hinge Health

Total funding: $841M
Latest valuation: $6.2B (2021)
Year founded: 2015
Current status: Active
Number of employees: 1,461
Location: San Francisco, CA
About: Hinge Health is a digital clinic for joint and muscle pain, selling its care to insurers, self-insured employers, and health plans. Their digital care programs combine wearable sensor-guided exercise therapy with behavioral health support, education, and health coaching to reduce chronic pain and prevent the need for surgeries. Other than some board drama, Hinge seems to be smooth sailing. There have been no announced layoffs.

23andMe

Total funding: $805M
Latest valuation: $842M (July 2023)
Year founded: 2006
Current status: Public
Number of employees: 816
Location: South San Francisco, CA
About: 23andMe is a consumer genetics and research company that offers a personal genomics service. Users receive a DNA testing kit, and the company provides a breakdown of the individual's ancestry and genetic health risks. 23andMe's contributions have revolutionized personal health by giving individuals access to their genetic data. 23andMe went public in June 2021 via Special Purpose Acquisition Company (SPAC). Later that year, it acquired Lemonaid Health for $400M in cash and stock. 23andMe saw $272M in 2022 revenue, an increase of 11% YoY. Listen to my interview with 23andMe CEO Anne Wojcicki.

XtalPi

Total funding: $785M
Latest valuation: $2B (2021)
Year founded: 2014
Current status: Active
Number of employees: 1,000+
Location: Cambridge, MA
About: XtalPi is a pharmaceutical technology company that blends quantum physics, artificial intelligence, and high-performance cloud computing to improve drug design processes. The company aims to accelerate the drug discovery and development process, making pharmaceuticals more efficient and affordable. Last month, they announced a $250M AI drug discovery deal with Eli Lilly.

What do these companies have in common?

60% are active, privately-held companies, 30% are now publicly traded companies, and just one (10%) has shut down. Notice that none have been acquired — when you raise that much money, there are fewer potential acquirers
Average time in business is 12 years, median is 10 years
90% are run by male CEOs, only 23andMe has a woman at the helm
Geographically, four of these companies are in Silicon Valley, two in New York, two in Boston/Cambridge, one in Columbus, OH, and one in Chicago, IL
Their business models are varied, from D2C (Ro, 23andMe, Peloton, Jawbone) to B2B2C (Lyra Health, Hinge Health, Amwell) to B2B (Tempus, XtalPi)
The current valuation relative to venture funding multiple (AKA Multiple on Invested Capital, “MOIC”) ranges from Amwell’s 0.74x (they raised $843M and are currently valued at $628M) to Hinge Health’s 7.4x (they raised $841M and were valued at $6.2B in 2021), with an average of 3.9x across all 10 companies

Summing it up

The landscape of digital health startups is as varied as it is vast. The top ten highest-funded U.S. companies have each taken unique approaches to transform healthcare and, in the process, have attracted substantial investment. The common thread among most of these companies is the prevalence of challenges, proving that even with loads of funding, healthcare is hard.

So, while the influx of venture dollars into digital health startups signals a vibrant and active industry, it's clear that funding alone does not guarantee success. Companies must not only innovate but also navigate the complex dynamics of the healthcare sector. It's a balancing act that requires the ability to adapt in an ever-evolving landscape.

Note: Clover Health and Oscar Health, which have raised $1.3B and $1.6B respectively, are not included in this list because they are considered insuretech players, which are not tracked in the Rock Health digital health database.

But if we were to include them:

Oscar Health has raised $1.6B in venture funding with a current market cap of $1.71B (1.06x MOIC)
Clover Health has raised with a current market cap of $527M (0.40 MOIC)

The 10 Most Funded Digital Health Companies, Ever