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Investors in Digital Health Shift Focus to Early-Stage Deals
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By Brian Gormley, WSJ Pro
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Good day. Venture investors put slightly less capital into fewer financings for digital-health startups in 2024 than the prior year, according to new data from Rock Health.
U.S. digital-health startups raised $10.1 billion across 497 financings last year, down from $10.8 billion in 503 venture deals in 2023, according to Rock Health, an investor in the sector.
The industry remains far from its peak year of funding in 2021, when startups amassed $29.2 billion, according to the firm. Adjusting for inflation, last year’s funding total is in line with 2019, before the pandemic-era surge, when startups raised $8.2 billion, according to Rock Health.
Last year’s decline stems partly from an investor shift to earlier-stage companies, where investors can start fresh in companies that, unlike some later-stage peers, haven’t had to retool or deal with down rounds. And later-stage companies raising Series C and D financing raised smaller amounts in 2024, also contributing to the decline, Rock Health said.
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And now on to the news...
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Israel’s tech sector is among the world’s largest technology hubs, especially for startups. PHOTO: KOBI WOLF/BLOOMBERG NEWS
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Israel sees surge in tech funding. As the war against Hamas dragged into 2024, there were worries that investment would dry up in Israel’s globally important technology sector. In fact, a new survey found investment into Israeli technology startups grew 28% last year to $10.6 billion, The Wall Street Journal reports. The influx buoyed Israel’s economy and helped it maintain a war footing on several battlefronts.
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The increase marks a turnaround for Israeli startups, which had experienced a decline in investments in 2023 to $8.3 billion.
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“If you asked me a year before if I expected those numbers, I wouldn’t have,” said Avi Hasson, head of Startup Nation Central, the Tel Aviv-based nonprofit that tracks tech investments and released the investment survey.
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U.S. Targets China With New AI Curbs, Overriding Nvidia’s Objections
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The U.S. is imposing some of its strongest measures yet to limit Chinese advances in artificial intelligence, requiring companies to get government approval to export certain information about their AI models and set up large AI computing facilities overseas, The Wall Street Journal reports. The rules, out Monday, are a final push by the Biden administration in a yearslong effort to use export controls to stem China’s advances in chip-making and AI, and they have sparked a backlash from companies including Nvidia. The rules impose caps on how many advanced AI chips can be exported to certain countries and require a license to export the data that underpins the most sophisticated AI systems.
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Why ‘Cost Avoidance’ Became an AI Buzzword for Holding Down Headcount
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Businesses are starting to link their artificial intelligence initiatives with paring back hiring plans, or so-called cost avoidance, in an effort to justify investing in the technology, WSJ reports. Questions have loomed over whether AI can generate returns for businesses, leading corporate technology leaders to search for ways to show its value. The term also resonates at a time when companies continue to pare back spending—and when there is still broad skepticism AI can generate big returns.
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People
Felicis promoted Nancy Wang to partner, where she supports early-stage data infra and security startups.
Early-stage investor Visible Ventures promoted Yuriy Dovzhansky to partner. He joined the firm in 2021.
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Float Financial, a Toronto-based business finance platform, raised $50 million in Series B funding led by the growth equity business within Goldman Sachs Alternatives.
Overland AI, a Seattle-based startup developing advanced autonomy for uncrewed ground vehicles, secured $32 million in Series A financing led by 8VC.
Raspberry AI, a New York-based generative AI platform for fashion design, landed $24 million in Series A funding led by Andreessen Horowitz.
BforeAI, a New York-based predictive attack intelligence and digital risk protection provider, completed a $10 million Series B round led by Titanium Ventures.
Fermata, a Tel Aviv-based data science startup specializing in computer vision agriculture solutions, closed a $10 million Series A round from Raw Ventures.
Jotit, a Tel Aviv-headquartered edtech startup providing handwriting-focused tools, was seeded with a $10 million investment led by Owl Ventures.
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The Blue Origin New Glenn rocket sits on a launch pad at Cape Canaveral Space Force Station in Florida. PHOTO: JENNIFER BRIGGS/ZUMA PRESS
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