Funding at the intersection of healthcare and AI has been on a tear this past year. Even so, investment remains below the heights scaled during the 2021 market peak.
Last year, more than $7.5 billion globally went to companies applying advances in artificial intelligence to health-related areas such as medical services and pharmaceutical development, per Crunchbase data. This year is off to a brisk start as well, with nearly $1.68 billion already invested.
Yet even amid the hottest period ever for AI funding, investment in AI-enabled health startups has remained below 2021 levels. For perspective, we charted investment and deal totals for the past five years below.
Ultra-large rounds
Totals for this past year got a boost from a handful of ultra-large rounds.
By far the largest funding recipient was San Francisco-based Xaira Therapeutics, developer of an AI platform for drug discovery that secured a $1 billion Series A last spring led by Arch Venture Partners and Foresite Capital.
The next-biggest was Formation Bio, a New York-based startup using AI to speed up the drug development process, which pulled in $372 million in a Series D last summer led by Andreessen Horowitz.
Strong start in 2025
Although we’re only about six weeks into the new year, large AI-related health funding rounds are already accumulating.
The largest was a $275 million January Series F for Innovaccer, a San Francisco startup that makes an AI-enabled cloud tracking platform for healthcare providers. And last week, Abridge, an AI-driven platform for clinician conversations, picked up a $250 million Series D.
Two other big rounds went to Hippocratic AI, a generative AI healthcare startup that raised $141 million in a Series B at a $1.64 billion valuation, and Insilico Medicine, a company applying AI to pharmaceutical R&D that raised a $100 million Series E.
Where are the exits?
The past year also brought some exits for companies at the intersection of AI, pharma and health.
The smash hit of the past year was Tempus AI, an artificial intelligence precision medicine company that went public in June. Its stock has performed well, with shares up several-fold and a recent market cap around $11 billion.
Two others that went public in March have struggled. Shares of Metagenomi, which uses AI-driven algorithms to mine through proteins to find naturally evolved genome editing tools, are down more than 70% since the IPO. Alto Neuroscience, developer of a machine learning-driven precision treatment platform for psychiatric care, has also underperformed.
No obvious slowdown ahead
So far, there’s no obvious sign that investors are tapping the brakes on investments at the intersection of AI and health. We might even see a pickup as more health and biotech startups incorporate AI as a core focus area, given the technology’s rapid advancement and increasing sophistication.
As for public offerings, potential for this space looks a bit brighter than for tech overall. Even as venture-backed technology offerings have slowed to a crawl, we’ve continued to see a steady flow of biotech IPOs, including both AI- and non-AI-focused startups.
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Illustration: Dom Guzman
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